Real estate companies in Vietnam lose trillions

The 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 14,300 dong (RM2.65) per share on Jan 2, 2020 to 7,770 dong (RM1.44) on April 1, costing the group over 3.4 trillion dong (RM629.2mil) in its market capitalisation value.

LDG Joint Stock Company (LDG), has lost 1.13 trillion dong (RM209.1mil) in market capitalisation value due to falling share prices during the outbreak. LDG has decreased from 8,850 dong (RM1.64) per share on Jan 2, 2020 to 4,160 dong (RM0.77) on April 1.

Meanwhile, An Duong Thao Dien Real Estate Investment and Trading Joint Stock Company (HAR) was at 2,250 dong (RM0.42) per share on April 1, down by 1,700 dong (RM0.31) compared to the beginning of the year. As a result HAR’s market capitalisation value has plunged 185 billion dong (RM34.2mil), reported Tien Phong (Vanguard) newspaper.

Hoang Quan Real Estate Joint Stock Company (HQC) also fell by 80 dong per share to 1,070 dong (RM0.20) per share on April 1 against the start of this year, with market capitalisation value declining by 38 billion dong (RM7.03mil).

An Gia Real Estate Investment and Development Joint Stock Company’s (AGG) shares have also plummeted from 30,400 dong (RM5.63) per share on Jan 9 to 26,500 dong (RM4.90) on April 1. AGG has lost nearly 300 billion dong (RM55.5mil) 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,” Tín 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.

Vietnam News – April 5, 2020