The share values of several listed property firms have
dropped by as much as 80 percent this year as a result of a dreary real estate
market.
When the property market was
still bustling, real estate stocks were among the most attractive to investors.
However, multiple property companies have been helplessly watching their market
values drop since the beginning of the year.
Investors’ confidence in the market
also dwindled in accordance with the gloomy market trend, especially after the
central bank tightened credit for property even though the sector has yet to
recover since its fall in 2008.
The businesses of property
firms were reflected in their stock prices. Among the 60 listed realty firms,
the share values of several companies are now only 20 percent of the values at
the end of 2010.
Van Phat Hung Corporation
(VPH), for example, has seen its VPH price of VND25,000 per share at the end of
2010 drop to a mere VND5,000.
Similarly, Pacific Property and
Infrastructure Development Joint Stock Co. (PPI) witnessed its stock falling
from VND24,000 to VND4,600 per share on Wednesday.
Even giants such as Hoang Anh
Gia Lai (HAG) also records a slump in stock prices, from VND80,000 per share at
the end of last year to VND18,000 at present.
Market observers said the
credit tightening policy pulled down the trade volume on the apartment market
since investors no longer found this segment appealing.
In fact, due to the lack of
capital, many enterprises had to suspend the construction of new projects.
Under the pressure to settle their debts at banks, several enterprises have
also sold off their products to cut losses.
According to Savills Vietnam,
investors’ psychology is an important factor to the property market at the
moment which decides whether the cash flow will return to the market.
Fiachra Mac Cana, managing
director and head of the research department of HCMC Securities Co. (HSC), said
in a recent market analysis that property prices would decline drastically in
the first quarter of next year when banks forced small property companies with
high ratios of overdue debts to sell their products to pay debts.
As prices fell, investors would
be wiling to buy property products along with real estate stocks.
TTNEWS
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