Cement Stocks Outlook for the week - 19 to 23.May.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks
of major cement companies will continue to be in the green next week
as
the imminent formation of the Bharatiya Janata Party-led government at the
Centre
is seen as a positive development for the economy. The movement in
stocks,
however, will be range bound as market expects profit-booking to
follow
this week's strong rally in the run-up to election results. A stable
government
at the Centre was the need of the hour and now that it has been
established,
market is optimistic that new infrastructure projects will see a
boost.
The BJP-led National Democratic Alliance comfortably cleared the 272-
seat
hurdle which represents simple majority or the half-way mark in the 543-
seat
Lok Sabha.
This
is probably the first time in almost three decades that a single political
party
has bagged a simple majority. Although experts do not see an immediate
spurt
in cement prices, demand is seen improving over time and, therefore,
volumes
are seen improving. "Volume growth will come in the next 3-6
months,"
said H.M. Bangur, managing director, Shree Cement. Global ratings
agency
Fitch said the new government can strengthen investments by a clear
strategy
for fiscal consolidation, creating a low-inflation environment and
pushing
structural reforms. UltraTech Cement will consolidate as it has run up
sharply.
