The Hindu Business Line : Realty index ends in green

The BSE Realty Index shrugged off its negative psychological baggage that was weighing heavy on the valuations of the sector counters after Emaar MGF IPO was withdrawn in the wake of poor demand.

The bounce-back was a little more than in other sectors based on the clear signal by the Finance Minister, Mr P. Chidambaram, that bank lending to the sector ought to be at relatively lower rates. After five sessions of losses, the Realty Index had finished in the green on Wednesday.

The 14-stock Realty Index moved up 7.58 per cent up, more than the benchmark Sensex and only next to the Power Index (8.14 per cent) among all the indices. Except for one realty counter, Aant Raj Industries (-0.29), all others in the index finished in the green. Ansal Infrastructure gained the highest among the lot and closed around 16 per cent up.

Phoenix Mill improved by over 11 per cent. Unitech was the third real estate counter with double-digit gain at the end of the session.

Volume mark

In terms of traded volumes, however, not all reported more than their recent averages. While Unitech and Indiabulls attracted higher-than-average traded quantities on the BSE, DLF reported lower volume.

According to Mr Arun Kejriwal of KRIS, fundamentally nothing much has changed. The provisional figures put out by the NSE do not suggest great institutional buying spree, but surely the sentiment has improved on both domestic and international cues.

Mr Ajay Jaiswal of Angel Broking felt that the sector index owed much of the day’s activity to DLF and Unitech – the combined weight of both is about 60 per cent in the index.

While the Sensex has climbed down 20 per cent from its peak till Wednesday, the Realty Index had plummeted by around 32 per cent from its recent high.

He said the results of real estate firms were better in the third quarter. “But prospects of lower interest regime in the near future have helped some take a bet on the higher sales volume in the first quarter of 2008-09,” he added.

volatility

In the last one month, the realty stocks have seen strong volatility.

The sector index improved by little over 1 per cent in the last one week after Thursday’s rally, but still stands in the loss of 25.67 per cent in terms of valuation a month ago. Since January 15, the index declined on 17 occasions against 4 days of gains, including that on Thursday.

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