Indian Realty Stocks Hit New Lows
Thursday, June 19, 2008
With the Indian Inflation sky rocketing to double digits, foreign institutional investors who were the main buyers of Real Estate Stocks in India have mercilessly dumped. The carnage has gotten worse because Domestic Institutions are in no mood to pick-up stocks of these realty companies which absolutely have no transparency in their operations. Falling Land Prices is adding to realty Company woes. A broker even went to the extent of saying Politicians have started liquidating their Land holdings ahead of the General Elections.
Almost all of the Real Estate Stocks hit a new low in todays trading though Nifty managed to hold 4,500 levels.
Most realty stocks have fallen between 77% and 51%. Ansal Infra, DLF, SOBHA Developers, UNITECH all recorded new lows. Realty companies which were listed in the past 12-24 months have fallen below their issue Price. However, the good news is India is not in any sub-prime kind of crisis, its just the Greedy Realtors who have lost sleep as they built their structures using paper-cards and not bricks ;-)
Almost all of the Real Estate Stocks hit a new low in todays trading though Nifty managed to hold 4,500 levels.
Most realty stocks have fallen between 77% and 51%. Ansal Infra, DLF, SOBHA Developers, UNITECH all recorded new lows. Realty companies which were listed in the past 12-24 months have fallen below their issue Price. However, the good news is India is not in any sub-prime kind of crisis, its just the Greedy Realtors who have lost sleep as they built their structures using paper-cards and not bricks ;-)Labels: DLF, Real-Estate-Stocks-New-Low
posted by Webmaster @ 7:04 PM
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1 Comments:
For all the talk about a slowdown in the economy, real estate prices in most parts of the country have not corrected as much as most prospective buyers would have liked them to. But, shares of most real estate companies are not finding any takers even after falling nearly 50% from their record highs in January this year. This would suggest that the ongoing sell-off in real estate stocks is a good opportunity for bargain hunting. Yet, most brokerage houses are advising their clients against doing so, as they foresee testing times for the sector in the near term. In fact, many of them are recommending that existing investors cut their losses right away as they could be in for a long wait for share prices to come anywhere near their lofty highs.T he sharp rise in real estate prices, coupled with high borrowing costs has let to softening of demand. The slump in the stock market, too, has contributed to the trend as many investors were earlier routing their gains in share trading into real estate.Industry experts feel that companies that have managed to buy land in Mumbai at reasonable rates could be good bets even in these turbulent times. With outlook on the market as a whole being bearish, brokers expect realty stocks to slip further.Most property developers in India were riding the wave of an unprecedented demand due to a combination of rising affluence, tax benefits for home owners and low interest rates. But, this fuelled speculative buying in the sector, causing property prices to soar to exorbitant levels.For more view- realtydigest.blogspot.com
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