Tin mới
Are real estate and stock markets ‘communicating vessels’?
06/08/2010 - 188 Lượt xem
Have the communicating vessels been communicated?
Do Thi Loan, Secretary General of the HCM City Real Estate Association (Horea), said that a lot of land plots which have been left unsold, now become marketable. Most of the buyers are securities investors, who have earned fat profit from securities trading deals. Villas and high-grade apartments are the most wanted. The land parcels in districts 2 and 7 are selling at VND8.5mil/sq m, while they were offered at VND6mil/sq m several months ago.
Vo Dinh Quoc, Deputy Director General of ACB’s real estate trading floor also said that the number of successful transactions has been increasing considerably, especially after Tet. He said the company has received the order for buying a house worth VND100bil ($6.25mil).
As a matter of fact, investors tend to “put eggs into many baskets”, i.e make investment in many places in order to disperse risks. Securities investors will inject money in real estate market as well, and the stock and real estate markets have a close connection.
Tran Du Lich, Head of the HCM City Economics Institute, on one hand admitted the close connection of the stock and real estate markets in the world, on the other hand, said that he still cannot see the two markets in Vietnam communicate. Mr Lich said that it would be very good if the two markets can communicate as it would help cool down the stock market, while warming up the real estate market.
REIT, why not?
In fact, capitalising real estate, or raising funds for real estate projects through the Real Estate Investment Trust (REIT) is not a new concept. This solution was once suggested by the HCM City Economics Institute, which aimed to seek capital to stabilise the very hot real estate market at that moment.
Mrs Loan said that in principle, this is a tool of the capital market, which uses securities as a tool to stimulate the real estate market. Institutional and individual investors will put money in a fund, REIT. REIT will buy valuable properties with the raised funds, establish and manage the property portfolios as long term investment plans. The earnings from the real estate projects will be paid to investors as dividends. REIT can be formed up as a company and can be listed on the bourse.
Mrs Loan said that the attractiveness of REIT is the high rates of dividends. Besides, REIT’s shares have high liquidity, especially when they are traded on the official bourse. With REIT, the investment portfolios will be diversified, which can help minimise risks.
HCM City agencies put a high hope on REIT which is believed to help raise funds for real estate projects, thus warming up the frozen market.
|
Doan Tuong Trieu, Chairman of 577 Joint Stock Company: The stock market now is overly hot, and it would see falls in some time. If so, the capital on the stock market will inflow into the real estate market, as this is the second most lucrative market (after the bourse) in Vietnam at this moment.
Marc Towsend, Director General of CBRE: There is a tendency of raising funds for real estate market through the stock market. This proves to be a more favourite way of raising funds as it requires simpler procedures than borrowing money from banks. Therefore, this measure will be used more regularly in the coming time. Tran Du Lich, Head of the HCM City Economics Institute: In order to successfully capitalise the real estate market, state management authorities have to create favourable conditions for issuing real estate bonds or shares and putting the securities into transactions on the bourse. |
Source: DTCK
