Market sentiment causes decline in property prices
Market sentiment causes decline in property prices
JAKARTA (JP): Negative market sentiment, rooted in a common
assumption that property companies might suffer problem loans,
has caused a steady decline in the prices of most property stocks
since last September, a securities analyst said.
"The reality might not as bad as is assumed. But the issue
would become clearer if property companies disclosed their
financial positions," the director of the Sigma Research
Institute, Jasso Winarto, told The Jakarta Post.
During the period between last September and Jan. 19, the
prices of most property shares declined by between 2.5 percent
and 27 percent.
According to Bank Indonesia, the central bank, credits for
property development as of last September exceeded Rp 41 trillion
(US$17.94 billion) or 17.2 percent of banks' total outstanding
credits.
Bank Indonesia, therefore, has repeatedly urged banks to curb
credit expansion for property companies.
Jasso said that while the Jakarta Stock Exchange (JSX)
Composite Index closed the third week of January about 9 percent
higher, property stocks rose only by 2.3 percent.
"The major boost to the property sector index last week was
generated mainly by the rise of Bhuwanatala Indah Permai (BIP)
shares (11 percent) and Ciputra Development shares (22.2
percent)," he said.
Jasso said that the surge of BIP shares was due not to any
fundamental factors but because of the take-over plans by two
businessmen, Bambang Trihatmodjo and Johanes Kotjo.
"Rumors said that the takeover of BIP, which owns the Bandung
Indah Plaza shopping center in Bandung, is intended to pave the
way for the two businessmen to acquire the total assets of Bank
Summa," Jasso said.
Meanwhile, the rumors of Ciputra's resignation from Jaya Real
Property was a positive news for Ciputra Development.
A director of PT Asian Development Securities, Ikada, told the
Post investors are worried that property companies may not be
able to increase sales due to the news about over-supply of
apartments and office spaces.
However, according to Ikada, foreign investors may buy one or
two selective property stocks for investment diversification.
According to the latest data from JSX, 13 of the 22 companies
listed on the exchange have issued their income statements for
the first nine months last year.
Data from Sigma Research, however, showed that during the
fist nine months of last year, only four companies reported
profit increases, while 11 other companies saw profit slump. No
data were immediately available on the other seven developers.
Sigma Research said that Jaya Real Property booked Rp 78.9
billion in net profits (increase of 47 percent), Ciputra
Development Rp 78.2 billion (27 percent), Plaza Indonesia Realty
Rp 31 billion (21 percent) and Summarecon Agung Rp 24.4 billion
(36.5 percent).
Companies which reported a decrease in their net profits
included Lippo Land Development (46 percent), Ometraco Realty (50
percent), Putra Surya Perkasa (34 percent), Bhuwanatala Indah
Permai (57.8 percent), Pudjiadi & Sons (4.7 percent), Pantja
Wiratama (33 percent), Metro Supermarket Realty (31.2 percent),
Duta Anggada (13 percent), Moderland (9.6 percent), Duta Pertiwi
(2.1 percent) and Dharmala Intiland (16 percent). (08)