A rally in cement stocks dominated the latest session in Abu Dhabi. Cement Company led turnover in Abu Dhabi, jumping 6.75 per cent to 4.43 dirhams. The stock hit a one-month high of 4.53 dirhams during the day and was trading at around nine times 2006 earnings.
"It seems to be a huge buyer," said a fund manager in Abu Dhabi. "I don’t know if it will last ... the stock has a low (price to earnings ratio) but there’s nothing different about it today than yesterday."
Five cement stocks were among the top 10 gainers in Abu Dhabi with RAK Cement closing up 3.60 percent at 2.30 dirhams. The stock peaked at 2.35 dirhams during the day, its highest level since June 4. National Cement Co was the biggest gainer in Dubai, closing 4.83 per cent up at 14.10 dirhams.
Cement firms are riding a regional construction boom as Gulf Arab governments invest their petrodollar windfall in infrastructure development. "Cement firms can barely keep up with local demand," Kanaan said, adding that large investors were bullish on the sector.