Shares in CRH soared on Tuesday amid reports of an upcoming massive US infrastructure spending package to reboot the world's largest economy which has been hit by coronavirus.
The Dublin-based building materials giant generates 55 per cent of its revenues in the US, Cantor Fitzgerald analysts highlighted in a note to clients. CRH is the biggest roadbuilder in the market.
Reports surfaced late on Monday in the US that the Trump administration is preparing to spend almost $1 trillion, boosting equity markets globally.
A preliminary version of the proposal being prepared by the US government would reserve most of the money for traditional infrastructure work like roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband, Bloomberg reported.
An existing US infrastructure funding law is up for renewal at the end of September, and the administration sees that as a possible vehicle to push through a broader package, according to the report.
While CRH and other building materials groups received a boost on Donald Trump’s election as US president in November 2016 amid speculation that he would prioritise a promise for massive infrastructure spending, the Republican has so far failed to deliver.
Over the line
“The president has often talked about infrastructure stimulus but, to this point, that has been just that – talk. However, given the impact of the pandemic and the looming election we believe the odds of getting something over the line are growing,” said Davy analyst Robert Gardiner.
Shares in CRH closed 7.2 per cent higher at €32.08 on Tuesday. They have rallied almost 100 per cent from their March lows, recovering much of their losses when Covid-19 started to spread at pace through Europe and North America.
CRH said in late April that it had managed to keep business levels at between 80-85 per cent of normal activity in North America during the worst of Covid-19 economic lockdowns globally.
