Building index climbs most in nine months
According to an analyst investors are seeing more and more opportunities now.
Construction-stocks gauge rose the most in nine months on expectations that the outlook for the industry is improving.
The ten-member FTSE/JSE Africa Construction & Building Materials index climbed 2,5% to 44,81 at the close in Johannesburg, its biggest increase since June 7. Pretoria Portland Cement Co led gains.
“The construction sector may have bottomed” after the index fell 26% last year, Henre Herselman, a derivatives trader at Nedbank Group’s BoE Stockbrokers in Johannesburg, said by phone. “Investors are seeing opportunity.”
President Jacob Zuma announced plans for a “massive” infrastructure drive in his February 9 state-of-the-nation speech to help spur investment and support growth in the continent’s biggest economy. The Treasury allocated R844,5 billion to telecommunications, energy, transportation, housing and water projects in the three years through March 2015.
Pretoria Portland Cement, South Africa’s biggest cement producer, rallied 4,1% to R31,35, bringing its gain this year to 14%. Murray & Roberts Holdings, the second-largest construction company, rose 3% to R29,25. Group Five added 1,7% to R27,72 rand while Aveng advanced 1,9% to R36,70.