Shares of ACC Ltd. and rival Indian cement makers surged after Morgan Stanley said prices may rise on the finance minister’s statement the government hasn’t asked companies to freeze rates and wouldn’t interfere in setting them.
“Pricing power appears to have returned for the next six to nine months for cement companies,” Mumbai-based analyst Akshay Soni at Morgan Stanley said in a note to clients today. “With inflation easing, the government seems to have relaxed their stance on cement pricing.’’
In an interview broadcast yesterday, Indian finance minister Palaniappan Chidambaram clarified there was neither a price freeze in cement nor any plan to interfere with cement prices, Morgan Stanley said in the note.
“We believe that this is a byproduct of inflation moving down to manageable levels,’’ analyst Soni wrote.