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)