Arabian Cement Company (ACC) has shelved plans to penetrate the Brazilian market and build a cement plant due to lack of investment feasibility as the Brazilian economic situation worsens. In 2014 the company’s board of directors approved penetrating the Brazilian amid strong growth prospects in Latin America. On another front, the decision to cancel five new cement licenses of the eight that the government offered two weeks ago, will reflect positively on the stock price, given that the supply/demand gap will be narrower than expected.
“We believe that the cancellation of the five licenses will serve as an immediate catalyst to the stock price.” noted a report by Prime securities which accordingly revised its previous fair value of LE8.58, which factored in declining margins in 2019/2020 when the new capacities come on stream. The new fair value became LE10-12.
