Realty Stocks See Sharp Appreciation

May 21, 2007	(1 votes, average: 3 out of 5)  Loading ...
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Though, Indian real estate may be undergoing a bad phase but stocks of real estate companies are showing an upward trend, in sharp contrast to their performance in the last three months.

Industry connoisseurs and property developers are all abuzz trying to explain the sudden rise. Such a sudden movement is absolutely unbelievable for them, confesses Pradeep Jain, chairman of Parsvnath Developers, which has seen its stock jump 10% in the last week.

Outlined below is the table showing the stocks of different real estate companies:

Apart from taking viewing it as an unexpected shift, the rise in realty stocks has come as a real surprise for some property experts who cannot understand why property stocks should move up so suddenly.

After falling by 20% in the first five months of 2007, the scrips suddenly began recovering by May and then recorded the sharpest appreciation last week.

The impending initial public offers (IPOs) of Delhi based property giant DLF has caused the rally.

After the DLF IPO finally gets Sebi nod, the real estate stocks have been re-rated. Unitech has seen the maximum profit as compared to other players. Also, the company has not yet announced its quarterly results, says Siddharth Gupta, analyst, Macquarie Securities.

The increase, however, contradicts guidelines recently released by the government and the Reserve bank of India (RBI) to cool what they consider overheating demand.

The RBI’s consistent warnings to banks to reduce their exposure to real estate has resulted in lending rates to builders rising to an impractical 14%, a 300 basis point hike in the past three months.

News Published Under:   Banking and Finance, Real Estate Developers |

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