Want to be in the loop?
subscribe to
our notification
Business News
REAL ESTATE STOCKS MIGHT PEAK IN FIRST HALF OF 2019
Real estate stocks might peak in the first half of 2019 or even earlier, in the last quarter of this year, experts have forecast. The recovery of the property market helped boost real estate stocks during the past five years. According to financial services company Stockplus’ Fiinpro Platform, real estate stocks posted better growth than the overall market.
Statistics showed that real estate stocks increased by 143.3 per cent in the 2014-18 period while the VN-Index rose by 96.5 per cent.
Earnings per share (EPS) of real estate stocks saw stable growth in the period, despite a mild decrease in 2015. It was forecast to grow by 21.9 per cent by the end of 2018 if shares of Vinhomes Joint Stock Company (VHM), a real estate developer of VinGroup, were excluded. VHM was traded on HCM City Stock Exchange on May 17 with a market capitalisation of nearly US$11 billion.
Including VHM, the EPS of real estate stocks could jump by 72.3 per cent by the end of this year.
According to real estate services firm Savills, the real estate market has not shown any signs of crisis. However, up to 65 per cent of high-end home purchases were for investment purposes and the risks might depend on the sensitivity of buyers’ income to interest rates.
According to Stockplus, the real estate sector was largely dependent on whether the policies created favourable conditions for developers to raise capital from banks and buyers and more important, liquidity.
Credit for real estate developers saw a slowdown but for buyers saw a strong increase, which would help banks prevent risks, Stockplus said. Statistics of FiinPro Platform showed that outstanding loans for developers rose by 5.78 per cent in the first half of 2018 while for buyers saw an increase of 10 per cent.
Thus, investors should keep a close watch on specific real estate companies to make investment decisions based on the developer’s capacity, project construction progress and sale results, according to Stockplus.
Overall, experts at the FiinPro Talk 7 event held recently agreed that real estate stocks might reach their peak in the first half of 2019 or even earlier in the fourth quarter of this year.
According to Le Duc Khanh, strategy director of PetroVietnam Securities, real estate stocks might see strong division. The cash flow will focus on a few real estate stocks with bright business result prospects.
The excess of real estate supply as compared with demand, together with the tightened credit for real estate sector, were affecting the attractiveness of real estate stocks, he said.
In the remaining months of this year, real estate stocks would not be the major group which drove the market, Khanh said, adding that banking, oil and gas, and securities stocks would be more attractive.
Still, large-cap real estate stocks would have significant impacts on the fluctuations of the VN-Index, Khanh said.
Source: VIR
Related News
CUSTOMS BUDGET REVENUE EXPERIENCES 3% DECLINE IN Q1
Vietnam’s import and export value reached a total of US$145.59 billion in the first quarter (Q1) of 2024, marking a year-on-year growth of 18.2%. However, the customs budget revenue saw a 3% year-on-year decline, amounting to VND71,520 billion in the quarter, thereby achieving 19.1% of the full-year target.
RAPID LAW IMPLEMENTATION MAY PROPEL MARKET FORTUNES
“Investors and developers are looking forward to the implementation of the new law, which will remove obstacles for a range of projects that are struggling due to stalled procedures and lack of legality. For them, the earlier the better,” he said.
NATION URGED TO BUILD ON ECO-IP MODEL
Industrial parks (IPs) involved in an initiative that aims to help push them into the realm of being classed as eco-parks have seen improvements across a string of indicators, according to a review event in Ho Chi Minh City last week.
YEN LU INDUSTRIAL PARK: NEW DESTINATION FOR INVESTORS
Bac Giang is a destination chosen by many domestic and foreign investors thanks to its locational advantages and its most opening and favorable investment policies. Assisted by local authorities, Capella Land Joint Stock Company has effectively invested in industrial zones, especially Yen Lu Industrial Park - a new destination for investors, to contribute to the province’s success in investment attraction.
DEMAND SOARS, POWER ECONOMY URGED
The serious electricity shortage in the northern region in May-June 2023 is a valuable lesson on the importance and pivotal role of ensuring electricity security for socioeconomic development.
OPTIMIZING LEGAL AND REGULATORY FRAMEWORKS FOR EFFICIENT PUBLIC INVESTMENT DISBURSEMENT
According to the Ministry of Planning and Investment, a 1% increase in public investment raises GDP by 0.058%, and each VND1 disbursed stimulates an extra VND1.61 from the non-state sector. However, plan implementation often falls short at around 80% annually, despite government efforts.