rupeedesk.in
Most cement sector stocks are likely remain in the positive territory next week along with the broader market. However, the rise is likely to be limited due to concerns over monsoon. The stock market is seen extending gains during the week due to continued short covering by us. During the start of the week, market is likely to react to the government setting infrastructure targets for 2013-14 (Apr-Mar). The prime minister set a target of two new airports at Bhubaneswar and Imphal, 50 new low cost small airports, eight greenfield airports, and two public-private-partnership ports at West Bengal and Andhra Pradesh.
A target of rolling out public-private-partnership projects of around 1.5 tln rupees in the next six months was also set. The government has estimated that the infrastructure sector would require $1 tln during the 12th Plan Five Year Plan (2012-17) and expects the private sector to contribute at least half of it. Developments in the infrastructure sector has a direct bearing on cement demand. The government announcement brings a spark of hope for the sector even though work on ground is yet to be seen. We had expected some movement in infrastructure projects due to general elections next year. Otherwise, short-term outlook for the sector remains grim. An average of six cement companies showed a increase of 2.7% year-on-year in despatches in May. On a month-on-month basis, despatches increased by 4.4%. However, with India getting above average rainfall in most of the days in June the despatches may come down.
Most cement sector stocks are likely remain in the positive territory next week along with the broader market. However, the rise is likely to be limited due to concerns over monsoon. The stock market is seen extending gains during the week due to continued short covering by us. During the start of the week, market is likely to react to the government setting infrastructure targets for 2013-14 (Apr-Mar). The prime minister set a target of two new airports at Bhubaneswar and Imphal, 50 new low cost small airports, eight greenfield airports, and two public-private-partnership ports at West Bengal and Andhra Pradesh.
A target of rolling out public-private-partnership projects of around 1.5 tln rupees in the next six months was also set. The government has estimated that the infrastructure sector would require $1 tln during the 12th Plan Five Year Plan (2012-17) and expects the private sector to contribute at least half of it. Developments in the infrastructure sector has a direct bearing on cement demand. The government announcement brings a spark of hope for the sector even though work on ground is yet to be seen. We had expected some movement in infrastructure projects due to general elections next year. Otherwise, short-term outlook for the sector remains grim. An average of six cement companies showed a increase of 2.7% year-on-year in despatches in May. On a month-on-month basis, despatches increased by 4.4%. However, with India getting above average rainfall in most of the days in June the despatches may come down.
