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Real estate market motionless, real estate share items fluctuate   2008-10-02 - Dau tu

While the real estate market has been dormant this year, share items of real estate firms have experienced ups and downs.


A lot of investors thought that the frozen real estate market would make the prices of real estate firm shares decrease, and they sold all the shares they held.


However, they were later astonished to hear that real estate firm shares unexpectedly soared in price. Several share items saw two-fold increases. But they were even more amazed thereafter when the shares fell dramatically by 30-40%.


The recovery of the stock market in August helped real estate shares increase in value. Shares of Song Da Industrial Zone and Urban Investment Corporation (SJS) increased by 71.2% in value, while SC5 of the Construction Company No 5 increased by 70.9%, NTL of Tu Liem Urban Development Company by 100%. Other real estate firms also saw their shares become more valuable with HDC of Ba Ria-Vung Tau Housing Development Company up by 42%, TDH of Thu Duc Housing Company up by 33%, while UIC of the Urban and Housing Development Company (IDICO) by 59%.


Explaining the increases, the Analysis Director of SME Securities Company said that the real estate share prices increased because the shares were supported by good news and by the recovery of the stock market as a whole. The price of SJS, for example, increased in many consecutive trading sessions on the news that Song Da Industrial Zone and Urban Investment Corporation reached a deal on selling 5 ha of land to a Singaporean partner with the contract value of up to VND700bil.


However, the real estate share bubble burst and the share items’ prices dropped sharply. For example, TDH plunged from VND70,000/share to VND42,000/share within half a month.


Similarly, SJS dropped from VND140,000/share to VND100,000/share, SC5 from VND57,000/share to VND34,000/share, while HDC from VND50,000/share to VND32,200/share. Most real estate share items saw prices fall more sharply than the average decreases.


Cao Thi Hong, Deputy Director of the International Securities Company, said that real estate shares have been affected by the frozen real estate market. However, she believes that when the national economy escapes from its most difficult period, real estate shares prices will soar again.


Analysts have attributed the share price increases in August to the fact that investors expected the recovery of the real estate market when there were more transactions. However, the market did not heat up as they expected in September, which explains why investors turned their back on real estate shares in the month.

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