Real Estate revival in Mumbai and India could trigger a major upswing in the stock market for companies catering to real estate sector.
- 11th Oct 2014
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Stock brokerage companies are capitalizing on the reviving housing industry in Mumbai in a very interesting and indirect way. The buzz in the real estate industry especially on the residential front is causing many brokerage firms to advice their investors and clients to invest heavily in companies and entities that would directly gain from the upswing in the property sector.
So everything that is remotely connected to the housing industry including companies like paint manufacturers, electrical fittings, home appliances, furniture companies, laminates, kitchen equipment manufacturers, marble and flooring companies, electricity cabling manufacturers, upholstery, modular furniture, cement companies, steel, sanitary ware, pipes, plumbing, home decors, etc. is now in the eyes of investors and of course share broking houses as potential money making investments.
According to real estate industry experts, the last quarter of 2014 and the first quarter of 2015 is going to see a lot of positive momentum in the real estate sector due to a much stable and proactive government at the helm of affairs currently. Apart from these factors there have been a lot of potential buyers who have been fence sitter for the last couple of years but have now found the courage and assurance from the positive sentiment overall to actually participate in the home buying process.
Direct buying of the real estate stocks of even big real estate developers in India has never got off to a high simply due to the much unorganized nature of the real estate development sector. People have not been forthcoming when it has come to invest in sticks of real estate development companies. However all the other industries that cater to this very sector have found that their stocks have been rising and there has been a renewed interest in their stocks.
BSE's Realty index has declined over 17% in the last 3 months against the 4% rise in BSE Sensex. Some of the major players in realty sectors such as DLF, Unitech have seen their stock prices fall 25% and 27%, respectively.
The speculation that covers a lot of leading realty players in India with regards to their debts and current capital position is still a major hindrance to the housing and real ty sector boom in India. Add to this the high interest rates in terms of bank lending and permission delays, India does have a lot of catching up to do for providing a robust and stable position to Indian real sector as a whole. The biggest advantage that India definitely has is the number of actual consumers that we have. If all the players in realty sector can put their minds together and come up with a win-win formula, it would be great of the Indian real estate industry.
Meanwhile making hay during the mini boom of real estate in India are shares of companies like Pidilite Industries, Canfin Homes, GIC Housing, Indiabulls Housing, Havells India, Crompton Greaves, Cera Sanitaryware, Kajaria Ceramics, HSI, Asian Paints, Berger Paints, Century Plyboards among others.
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