Trump helps CRH shares surge to within whisker of all-time high

Shares in CRH, which makes up 30 per cent of Dublin's Iseq index, surged to within a whisker of an all-time higher on Wednesday morning amid growing optimism over US president Donald Trump's infrastructure spending plans and the outlook for global growth.

CRH jumped as much as 3.5 per cent to €34.465 early in the session, within half a cent of a record high set in July 2007, before the global financial crisis and economic slowdown. The shares closed at €34.025, up 2.18 per cent.

Mr Trump signed five executive orders on Tuesday, including one to expedite environmental review and approval of high-priority infrastructure projects. Separately, Democrats in the US senate unveiled a proposal to spend $1 trillion over a decade for road, bridge, rail and bus programmes as well as sewage and water projects.

Orders

"In the first few days of his presidency, Mr Trump has engaged in pro-business rhetoric and signed multiple executive orders that are in line with his stated policy during the campaign," said Cantor Fitzgerald analyst Will Heffernan. "It bodes well for a business-friendly environment for the next four years and the stated policy of infrastructure investment should be a significant tailwind [for] the cement industry."

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Almost 60 per cent of CRH’s operating earnings are expected to have come from the US market in 2016, with about 60 per cent of that generated by its materials division, which is responsible for asphalt, concrete, cement and readymix, according to Mr Heffernan. CRH shares have soared by almost 15 per cent since the US election in November.

Tailwind

“A strong US dollar will also act as a tailwind from a revenue perspective,” he added. The dollar has risen by 2.5 per cent against the euro since the vote.

While Goodbody Stockbrokers analysts noted that recent developments in the US highlight that the focus of both Mr Trump – a Republican – and senate Democrats is to support infrastructure, they said that "greater clarity is required on the proposed implementation of any plan, particularly in relation to funding".

Separately, the S&P 500 and Nasdaq stock market indices closed at record highs on Tuesday, while the Dow Jones closed less than 90 points from the keenly-eyed 20,000 point level as a slew of better-than-expected corporate earnings underpinned hopes for the global economy.