Real estate companies lose trillions of dong due to COVID-19
The novel coronavirus (COVID -19) outbreak has cost many real estate firms trillions of dong from their market capitalisation value.
Dat Xanh Group Joint Stock Company (DXG) is one of those to have suffered the greatest impacts of the pandemic, leading falling share prices.
The price of DXG dropped strongly from VND14,300 per share on January 2, 2020 to VND7,770 on April 1, costing the group over VND3.4 trillion (US$145.2 million) in its market capitalisation value.
LDG Joint Stock Company (LDG), has lost VND1.13 trillion in market capitalisation value due to falling share prices during the outbreak. LDG has decreased from VND8,850 per share on January 2, 2020 to VND4,160 on April 1.
Meanwhile, An Duong Thao Dien Real Estate Investment and Trading Joint Stock Company (HAR) was at VND2,250 per share on April 1, down by VND1,700 compared to the beginning of the year. As a result HAR's market capitalisation value has plunged VND185 billion, reported Tien Phong (Vanguard) newspaper.
Hoang Quan Real Estate Joint Stock Company (HQC) also fell by VND80 per share to VND1,070 per share on April 1 against the start of this year, with market capitalisation value declining by VND38 billion.
An Gia Real Estate Investment and Development Joint Stock Company’s (AGG) shares have also plummeted from VND30,400 per share on January 9 to VND26,500 on April 1. AGG has lost nearly VND300 billion in the last three months.
According to economist Nguyen Minh Hoang, the real estate market this year has been facing many difficulties due to low supply and the impact of COVID-19. Therefore, real estate stocks were unlikely to resume growth quickly so investors should be cautious.
Financial expert Bui Quang Tin from the Banking University of HCM City told Tien Phong that the domestic stock market was difficult to forecast for the next few months so investors should follow the market closely and avoid sell-offs or bottom-fishing.
“The stock market will have recovery when the pandemic ends. After this pandemic, enterprises will resume production and stabilise business activities. At that moment, capital in the stock market will increase and of course, share prices will surge,” Tin said. “But that is the prospect for the next 3-6 months.”
Meanwhile, Truong Hien Phuong, brokerage director at KIS Vietnam Securities Corporation’s branch in HCM City, said if investors were interested in real estate stocks, they should study who owned those shares and wait until the market had made reasonable adjustments to buy them, Phuong said.