GulfBase GCC Cap Indices
IndexLevelChg%
Large Cap3,912 -0.22
Med Cap3,902 0.08
Small Cap5,065 -0.07
Micro Cap8,584 0.50

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Ticker Price Volume
QNBK 143.8 312,074
SABIC 95.98 4,534,377
GFH 0.62 131,131
DU 5.58 788,634
ALMARAI 73.08 135,963
NBAD 11 4,851,634
EEC 20.57 1,278,229

GCC Cement Sector

Source: Global Investment House

Over 25% planned projects in GCC being put on hold
GCC project market which rose from US$300bn in 2004 to US$2.67tn by 1Q-2009 drastically reduced to US$2.1tn as of 3Q- 2009. Within these planned project 25% of them have been put on hold. As per our calculation even if 75% projects continue as per plan and of them even if 40% are construction related than it would result in an annual average cement demand of 90.6mn tons till 2017. Whereas GCC capacity would be crossing 120mn ton mark by 2011, glutting the market with cement.

Utilization rates are expected to be in the range of 65-70%
With lesser projects continuing because of the economic uncertainty, the demand of cement has declined because of which the utilization rates of cement manufacturers has gone down to an average of 75% as of 9M-2009. With the continuing capacity build up and lesser demand we expect the utilization rates to fall in the range of 65-70% going forward until the project market picks up.

Realization prices to decline post 2009
Average realization prices as of 9M-2009 have declined on an average of 6% in GCC when compared with those of 2008. Countries with relatively stable prices are Saudi Arabia and Oman while the rest have witnessed a major fall. With ongoing capacity buildup we expect further pressure on cement manufacturers.

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