Real estate companies lose trillions of VND due to COVID-19
The novel coronavirus SARS-CoV-2-caused acute respiratory disease (COVID -19) pandemic has cost many real estate firms trillions of VND from their market capitalisation value.
The Dat Xanh Group Joint Stock Company's Opal Skyview project in Hanoi. (Photo centralland.com.vn)
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 14,300 VND per share on January 2, 2020 to 7,770 VND on April 1, costing the group over 3.4 trillion VND (145.2 million USD) in its market capitalisation value.
LDG Joint Stock Company (LDG), has lost 1.13 trillion VND in market capitalisation value due to falling share prices during the outbreak. LDG has decreased from 8,850 VND per share on January 2, 2020 to 4,160 VND on April 1.
Meanwhile, An Duong Thao Dien Real Estate Investment and Trading Joint Stock Company (HAR) was at 2,250 VND per share on April 1, down by 1,700 VND compared to the beginning of the year. As a result HAR's market capitalisation value has plunged 185 billion VND, reported Tien Phong (Vanguard) newspaper.
Hoang Quan Real Estate Joint Stock Company (HQC) also fell by 80 VND per share to 1,070 VND per share on April 1 against the start of this year, with market capitalisation value declining by 38 billion VND.
An Gia Real Estate Investment and Development Joint Stock Company’s (AGG) shares have also plummeted from 30,400 VND per share on January 9 to 26,500 VND on April 1. AGG has lost nearly 300 billion VND 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,” Ten 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./.
The HCMC Real Estate Association has urged the Government to add the property industry to the list of those affected by the COVID-19 outbreak and are eligible for a five-month postponement of VAT and land-use fee payments.
Real estate companies will suffer in the short term due to the COVID-19 pandemic, but the overall outlook remains positive, according to a CBRE report.