Sephaku and PPC cement their gains

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Sephaku and PPC cement their gains

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Published Date: 2021-10-13 | Source: INCE|Community | Author: The Finance Ghost

Sephaku and PPC cement their gains

In a win for local manufacturing of cement, government has effectively banned the use of imported cement in government-funded projects from 4 November 2021. This is a protectionist policy designed to curb the importation of cement that beats the local players on price thanks to the foreign cement having lower compliance costs related to the likes of carbon tax.

Imported cement can still be used in private sector construction, but not in the public sector. One would assume that the analysis here focused on the downstream benefit of local jobs to South Africa vs. the higher costs of public sector infrastructure investment.

Government currently has fifty planned and twelve special projects as part of a drive to stimulate the economy. Four projects have been submitted for National Treasury approval, collectively valued at R21 billion. Sephaku notes that there are apparently four more projects being finalised for submission in 2022, valued at approximately R85 billion.

Sephaku and PPC are well-positioned to benefit from this. The PIC has increased its stake in PPC to 5.37%, with many jokes made on Twitter about whether this could be considered insider trading! Although one might argue that the PIC knew about government's plans in this regard, it's also worth noting that the PIC previously sold out of PPC at much lower prices.

Sephaku also noted in a SENS update that the SepCem kiln resumed production as scheduled on 6 October after an unplanned maintenance stop on 30 September.

Sephaku has rallied 34% in the past few days and PPC is up around 20% over the same period. PPC managed to survive a near-death experience in the past year and has posted a whopping year-to-date return of around 290%.





2 Comments

Layts 1 week ago

Hi Lesego. Have a look at Easy Equities, you can invest through them. Good luck

Lesego Holele 1 week ago

Are we allowed to invest as individuals



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