Taiheiyo Cement Shares Fall After Mizuho Cuts Rating


Updated 2007-11-22

Nov. 21 (Bloomberg) -- Taiheiyo Cement Corp., Japan's biggest producer of the building material, fell the most in six weeks after Mizuho Securities cut its rating on the stock because of rising coal prices and a weaker North American market.

The shares fell 20 yen, or 7.5 percent, to 247 yen. It was Taiheiyo's biggest one-day drop since Oct. 9, and the fourth- largest decline on the MSCI World Index.

``We now expect a greater increase in steam coal prices, and the North American cement market is trending weaker,'' Hiroshi Matsuda, an analyst at Mizuho Securities Co., wrote in a report dated yesterday. ``We forecast a significant decline in earnings in the cement segment.''

Coal prices at Australia's Newcastle port, a benchmark for supplies in Asia, rose to a record for a fourth-consecutive week in the week ended Nov. 16. on concerns of supply shortages.

Tokyo-based Taiheiyo gets about 50 percent of its operating profit from cement sales from North America, said Matsuda, who cut his rating on the stock to ``hold'' from ``buy.'' Cement products account for about 56 percent of Taiheiyo's sales, according to Bloomberg data.

Taiheiyo's shares have fallen 46 percent this year, compared with a 13 percent slide in the benchmark Topix index.


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