JOHANNESBURG, April 20 (Reuters) – Shares in PPC (PPCJ.J: Quote, Profile, Research, Stock Buzz)
dropped more than 4 percent in early trade on Wednesday after
the earnings forecast for South Africa’s biggest cement producer
disappointed investors.
Difficulty in finding new construction projects and tighter
private sector spending contributed in PPC forecasting a 35-40
percent decline in first-half initial profit.
“It’s a bit of a shocker,” Abri du Plessis, chief investment
officer at Gryphon Asset Management said. “I just shows you that
sector is struggling. The construction sector is taking pain.”
The outlook led its shares to fall by more than 4 percent in
early trade. By 0820 GMT, it was at 24.44 rand, underperforming
a 0.86 percent firmer JSE All-share index .JALSH.
Rival Murray & Roberts (MURJ.J: Quote, Profile, Research, Stock Buzz) rebounded on Wednesday, up
1.36 percent at 25.42 rand, after dropping more than 7 percent
in the last two sessions on industry woes that include suspected
bid rigging.
The stock dropped 5.44 percent to close at 25.01 on Monday
after M&R said executives of its unit Concor Ltd may have
transgressed the Competition Act. [ID:nLDE73H1MY]
Smaller rival Group Five (GRFJ.J: Quote, Profile, Research, Stock Buzz), which on February 14
posted a 21 percent drop in first-half profit, was slightly up
0.07 percent and Aveng (AEGJ.J: Quote, Profile, Research, Stock Buzz) was down 0.03 percent.
The JSE construction and materials index was down
0.89 percent in early trade.
Meanwhile Sephaku Cement, a unit of Sephaku Holdings
(SEPJ.J: Quote, Profile, Research, Stock Buzz), said on Wednesday it will build a 3,000 tonne per day
clinker and cement plant in South Africa.
“We remain firmly of the view that the South African growth
story is not yet over, and that it has legs deep into the
future,” Sephaku managing director Pieter Fourie said.
(Editing by Jon Herskovitz)