Realty stocks surge, rescuing the VN-Index from a fall
Realty stocks surge, rescuing the VN-Index from a fall
The stock market witnessed a reversal in its fortunes during Tuesday’s afternoon session as positive news related to the real estate market lifted realty stocks.
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On the Ho Chi Minh Stock Exchange, the VN-Index increased by 0.39 per cent to close at 1,069.46 points despite having traded below the baseline throughout the entire morning. The southern market’s index decreased 0.4 per cent on Monday.
Real estate stocks experienced a significant rebound after dropping earlier in the day, led by Novaland Group (NVL) and Vinhomes (VHM).
In the morning, NVL suffered a decline of 3.8 per cent but rebounded in the early afternoon and eventually closed at the highest price of VND14,200 (US$0.60) per share, up 7 per cent with over 63 million shares changing hands, the highest in the past four months.
This surge came in response to the news that on Tuesday, Nguyen Cao Luc, Deputy Chairman of the Government’s Office, signed a directive conveying Deputy Prime Minister Tran Hong Ha's instructions to the Ministry of Construction, Ministry of Natural Resources and Environment and People's Committees of Dong Nai and Binh Thuan provinces. The directive calls for relevant ministries to collaborate with the provincial committees to resolve the problems and difficulties faced by Novaland's projects in those regions, in accordance with the law.
Novaland, amid a difficult financial situation, has requested support from the Government and the State Bank of Viet Nam to overcome these challenges. The company's Chairman Bui Thanh Nhon has asked for regulations that would allow banks to relax, postpone, or hold debt groups for real estate projects for 2-3 years, as well as tackle legal bottlenecks for its projects throughout the country.
According to Novaland's leader, the company has VND25 trillion ($1.1 billion) blocked at commercial banks, with over VND10 trillion being eligible for release once legal proceedings are complete. Resolving this issue would provide Novaland with the necessary capital to continue operating normally.
Apart from Novaland, Vinhomes (VHM) also surged 3.4 per cent, leading the top shares lifting the VN-Index most. Other stocks like Development Investment Group (DIG), Dat Xanh Group (DXS), Sai Gon Thuong Tin Real Estate (SCR) and Hai Phat Investment (HPX) all saw impressive increases.
However, despite the Index’s rise, liquidity in HCM City's bourse decreased 19 per cent in volume and 23 per cent in value from the previous session, totaling 698 million shares worth VND11.6 trillion ($491.5 million).
On the Ha Noi Stock Exchange, the HNX-Index rose for a second day, up 0.16 per cent to end at 212.34 points. Liquidity also dropped here to 114 million shares worth VND1.7 trillion, down 30 per cent in volume and 24 per cent in value compared to Monday’s levels.
