Most property company stocks decline, many steeply

Even the chairpersons of some of these firms have been affected personally. Securities firms have recently force sold many shares held by the chairmen.

Nguyen Khanh Hung, chairman of LDG Investment Joint Stock Company, was forced to sell 713,000 shares of his company after margin calls were made against them by securities companies to whom they had pledged them.

Nguyen Van Dat, chairman of Phat Dat Real Estate Development Corp, sold 750,000 shares late last week.

Nguyen Thien Tuan, chairman of Development Investment Construction Joint Stock Company, has been informed he has to sell five million shares. His two children, vice chairmen of the company, need to sell 2.9 million shares.

Twelve property stocks have lost over 70% this year, with DRH Holdings Joint Stock Company falling by 81% and FLC Group Joint Stock Company by 80%.

HOSE has suspended trading in FLC shares since early September because of its failure to comply with disclosure regulations.

Some large-cap property stocks have dragged the VN-Index to below 1,000 points.

Chu Duc Toan, a senior analyst at VNDirect Securities, said the recent sell-off stemmed from the tightening of credit and crackdown on bond issuances, which caused financial problems for many property companies.

Besides, rising loan interest rates, reduced demand for real estate and strict action against property developers for wrongdoing and the rumors the action sparked all played a role, he said.

Nguyen Thi Phuong Lam, head of investment analysis and consulting at Viet Dragon Securities, agreed with him that the stocks of property companies that have big debts would lose further but those with healthy balance sheets would attract investors in the longer run.

Toan added: “It is not until capital flows are cleared and there is a reversal in monetary policy that we will see bright prospects for property stocks. This is unlikely to happen in the next six to 12 months.”