The worst performers since Diwali were real estate stocks although the BSE sensex had closed clocking 21005 which is an all-time high. As per the performance data of BSE (both sectoral and other indices) there was nearly a 3% gain in IT index whereas the real estate index showed a loss of 40.4%. Though there were also other losers like banking which was down by 20%, capital goods by 19%, and public sector units (PSU) by about 18% yet the realty index showed a downslide of nearly 22%.
According to market experts the reasons for this slump faced by the real estate sector may be because of the apathy shown towards realty stocks by investors and the low level of institutional holding. These factors have affected the performance of this sector. Edelweiss Securities stated in its recent report that there is robust housing demand in India but this demand is being dampened by rising interest rates, rising prices of residential properties and rising construction costs. In 2008 prices of residential properties had crossed peak levels in some cities. According to Edelweiss Securities sources these factors are still plaguing the real estate sector and are thus acting as dampeners thereby deterring the possibility of investments.
According to market experts the reasons for this slump faced by the real estate sector may be because of the apathy shown towards realty stocks by investors and the low level of institutional holding. These factors have affected the performance of this sector. Edelweiss Securities stated in its recent report that there is robust housing demand in India but this demand is being dampened by rising interest rates, rising prices of residential properties and rising construction costs. In 2008 prices of residential properties had crossed peak levels in some cities. According to Edelweiss Securities sources these factors are still plaguing the real estate sector and are thus acting as dampeners thereby deterring the possibility of investments.
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