Dallas, Texas 10/24/2013 (Financialstrend) – Cemex SAB de CV (ADR) (NYSE:CX) is a Mexico based cement manufacturer with a market capitalization of $12.9 billion. The cement manufacturer has been executing a series of restructuring moves designed to provide it with more attractive debt rations while shedding noncore assets.
In the past couple of months it has managed to pay back close to $1 billion debt ahead of maturity time. It also executed exchange and sale of its European assets with Swiss cement maker Holcim. The deal involved Cemex parting with its German asset to Holcim. In return the Mexican cement company will acquire Holcim assets based in Czech republic. In order to seal the good will generated by this asset swap, the two companies have signed off to merge their Spanish operations to realize the economics of scale and acquire a bigger share of the market.
In a favourable macro economic development the central bank of Mexico has made changes to the valuation of the currency. Thanks to the restructuring the peso is trading up 1.5% against the U.S. dollar. The central bank cut the benchmark rate to 3.75% by 25 basis points. The bank has also made it abundantly clear that it is open to further cuts if the economy warrants it. This appreciation in the peso is expected to build up pent up demand for construction and housing in Mexico. In turn this development is expected to drive up Cemex production of cement. The restricting of its debt portfolio and augmentation of production facilities in Czech has to be seen in this context.
As of 12:00 PM ET on October 23, the stock of this cement manufacturer was trading at $10.6 per share down 1.76% from its previous day close. In spite of the dip, the stock had gained 1.79% in the last 5 days of trading.