After Kazakhstan scrapped the trading band for its currency and moved to a free-floating exchange rate, the Kazakh Tenge dropped 23 per cent today.
Among the European Building Materials companies JP Morgan notes that HeidelbergCement is the most exposed. The German-based cement major generated around approximately one per cent of its EBITDA in Kazakhstan and JP Morgan expect the translational FX impact is likely to be c.37bps hit on EBITDA and around a one per cent hit on earnings per share. HeidelbergCement operates 3.9Mta of cement capacity in Kazakhstan from three plants.
Italy-based Italcementi is also exposed to the Kazakhstan market with 1.2Mta of capacity from its Shymkent cement plant.
HeidelbergCement and Italcementi have a combined market share of around 35 per cent in Kazakhstan, JP Morgan highlights.