Shares of Malaysian producers rise

Shares of local cement producers rose yesterday on news of a 50 per cent jump in the product price, as investors bet that business prospects would improve following the increase. YTL Cement Bhd, a unit of YTL Corp Bhd, rose nearly five per cent to close at RM2.20 yesterday. Cement Industries of Malaysia Bhd closed up five per cent at RM1.29. Leading cement maker Lafarge Malayan Cement Bhd gained 7.4 per cent, while Tasek Corp Bhd rose 0.4 per cent to close at RM2.31.

The cement price shot up to RM180 a tonne on July 1 from RM117 a tonne previously. Analysts said the higher price is a positive development for the cement business, but that the sector still looks bleak for the rest of the year. “It is too early to tell whether this price will continue to hold. And the cement business still looks tough due to the rising fuel cost,” said an analyst from a local research house.

He also said that since the cement industry is very much dependent on the local construction business, some consolidation is expected among the cement players and smaller concrete and ready-mixed companies.