Riyadh – Mubasher: Aljazira Capital remained positive on the Saudi cement sector, given the expected housing demand due to an increase in mortgage loans and the government’s mega projects.

The cement sectors’ fundamentals recovered on the back of improved cement prices. The average selling price rose by 33.4% to reach SAR 198/tonne in fiscal year (FY) 2019 form SAR 148.4/tonne in FY18, and is expected to average at SAR 198.9/tonne in FY20, according to the research company’s report.

Moreover, the sector is predicted to have attractive dividend payments for FY20. The fast recovery after pandemic and value-added tax (VAT) hikes in the sector has increased AlJazira’s estimated annual growth in net income to 16.4% in FY20.

“We remain Overweight on Arabian, Eastern, and Southern cement while upgrading Yanbu cement from Neutral to Overweight at SAR 40.2/share. We also maintain our Neutral on Yamama, Qassim and Saudi Cement Company. We initiate our coverage on Saudi White Cement Co. with ‘Overweight’ recommendation and a TP of SAR 33.6/share,” the report said.