MEXICO CITY (Reuters) - Shares of Mexico’s Cemex surged on Monday on hopes that U.S. President-elect Barack Obama’s infrastructure investment plans would translate into higher sales for the top U.S. cement supplier.
Obama outlined plans over the weekend for the largest U.S. infrastructure investment since the 1950s as his incoming administration seeks to jump-start the slumping U.S. economy.
A steep downturn in the U.S. housing sector has crimped spending on cement, and Deutsche Bank analyst Dan McGoey wrote in a note that Cemex’s sales, by volume, were expected to fall 10 percent in 2009.
“A U.S. stimulus package with emphasis on transportation could materially improve this outlook,” McGoey wrote.
Deutsche Bank estimates that Obama’s plan could boost U.S. cement demand 11 percent above 2007 levels.
That could lift Cemex’s consolidated earnings before interest, depreciation and amortization 3 percent next year, according to McGoey.
Cemex shares have been hammered in recent months as the downturn in the United States and Europe, its main markets, raised worries that the world’s No. 3 cement maker would have trouble with payments on $6.6 billion in debt due next year.
Reporting by Michael O’Boyle, editing by Matthew Lewis
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