Shares of two of Indonesia’s leading cement producers have lost at least 13 per cent from their July 2014 peak following the decision by the country’s new president to impose price cuts on state-owned cement manufacturers.

During the presidential election last July, shares of PT Holcim Indonesia and PT Semen Indonesia jumped to one-year highs fuelled by bets that Widodo’s US$18bn infrastructure spending pledge would boost domestic cement demand and lead to an earnings windfall. However, last month the president ordered state-owned cement producers to lower their selling price by IDR3000/bag (24 cents), a move that has now wiped out the recent share gains, according to Bloomberg.

According to the report, the intervention is sparking concern that Widodo’s efforts to revive Indonesia’s economy from the weakest expansion in at least five years will come at the expense of some of the nation’s largest companies.

Semen Indonesia’s shares dropped 10 per cent last month, the worst monthly slide since November 2013, while the Jakarta Composite Index rose 1.2 percent. Holcim also slumped 10 per cent, while PT Indocement Tunggal Perkasa fell eight percent.

While Indocement’s profit margin of 25.8 percent in the third quarter of 2014 was the highest among worldwide peers, with Semen Indonesia ranking second, analysts reduced their outlook for the stocks in the wake of the price cut.

Maybank Kim Eng Securities Indonesia downgraded both Indocement and Semen Indonesia to hold from buy and lowered their share-price targets by at least 17 percent, while HSBC Securities Asia reduced Semen Indonesia’s price target by 18 percent to 9,300 rupiah.

“The major risk for the cement industry is government intervention,” Arief Wana, a director at PT Ashmore Asset Management Indonesia, told Bloomberg. “You will see earnings cut and valuations re-rated.”