Oman Cement shares surge after price cap lifted - Emirates24|7

Oman Cement shares surge after price cap lifted

Shares of Oman Cement surged more than 8 per cent on Wednesday, the most in at least two years, after the government allowed it and rival Raysut Cement to raise prices and import the material.

The two companies - the government controls Oman Cement and has a stake in Salalah-based Raysut - will be able to raise their prices to 1.8 rials ($4.68) from 1.6 rials per 50 kilogramme bag from Sunday, Khalil Al Khonji, chairman of the Oman Chamber of Commerce and Industry told Reuters on Wednesday.

Shares of Oman Cement ended up 8.35 per cent while Raysut rose 2.9 per cent.

"This (price) increase will reflect on the company's turnover in the next year, prompting investors to accumulate its stock," said Adel Nasr, a broker at Muscat-based United Securities brokerage.

United Securities raised its 2008 forecast for Oman Cement's earnings per share to 0.062 rials from 0.052 rials, and for Raysut to 0.244 rials from 0.211 rials. Oman Cement had earnings per share of 0.050 rials last year while Raysut earned 0.150 rials a share.

The cement price rise is "to meet the inflation level," Khonji said. A global shortage of clinker, the raw material used to make cement, was hampering production, he said.

The two companies are producing a combined 10,000 tonnes per day, compared with demand of 13,000 tonnes, Khonji said.