Will real estate stocks benefit after a series of “good news” from Decree 08?

This Decree is expected to partly relieve pressure on corporate bonds. Since then, a positive impact on the stock market in general and real estate stocks in particular.

Recently, the Government has just issued Decree No. 08/2023/ND-CP amending and supplementing a number of regulations. For example, allowing enterprises to pay principal and interest of bonds due with other assets; allow extension of bond term up to 2 years; suspending regulations on professional securities investors, bond distribution time and credit rating requirements until December 31, 2023. This Decree takes effect from the date of signing for promulgation (March 5, 2023).

This Decree is expected to partly relieve pressure on corporate bonds. Since then, a positive impact on the stock market in general and real estate stocks in particular. In the recent livestream organized by Mirae Asset LM2, experts also gave their views on this issue.

Discussing the impact of the recently amended Decree 08, Mr. Huynh Minh Tuan – Founder of FIDT said that these new regulations will have a positive impact on the market.

In particular, the conditions that are difficult to meet and take time for the market to adapt are suspended until the end of 2023. Besides, opening the basis for settlement through negotiation, structuring, and asset swapping for with mature corporate bonds and troubled issuers, helping to reduce the risk of bond default.

According to Mr. Huynh Minh Tuan, the above information will positively affect the stock market in general and real estate stocks in particular. In the short term, Mr. Tuan believes that real estate stocks will react very positively because it is “sunny” and “showers”.

“With more than 6 million individual investors, of which nearly 80% are speculation, the real estate group still has a special appeal despite the huge volatility. However, investors need to remember that participating in real estate stocks at this time needs to be very knowledgeable in this field and not all businesses can invest,” Mr. Huynh Minh Tuan emphasized.

However, in the long term, there are still many unresolved difficulties. In the coming time, experts say that many real estate businesses are also likely to be eliminated and the Draft Land Law also clearly states that. In the future, real estate will not develop massively but will go into depth, going into real demand.

In particular, the expert emphasized that the legal story is also a key issue of real estate businesses. The problem that real estate projects are facing is (1) having to re-auction the whole (2) land use right calculation structure (3) resettlement. However, the extension of 2 years is also partly enough to solve legal problems for real estate businesses. Experts say that this is also considered as a purposeful purification to select really quality real estate businesses.

Sharing the same opinion, Mr. Ma Kha – Head of Investment Advisory Department Mirae Aseet also said that this Decree 08 will have a great response to the real estate group because this is the Government’s decree creating a legal corridor for businesses. It is likely that there will be a “T+ wave” for real estate stocks in the next few sessions. However, in the long term, it is still necessary to wait for the impact of these regulations on each enterprise. Because the long-term wave will follow the recovery speed, legal settlement time, sales ability, etc. of each business.

According to the analysis of Mr. Bui Tien Duc – Head of Investment Advisory Department of Mirae Asset , this information will have a positive impact in the context of the lack of supportive information in the market. However, investors should note that this is only a bright spot to relieve the hot spots of the real estate market, but it is difficult to expect the market to recover immediately.

Currently, experts see that real estate stocks are in the process of bottoming and this process may take several quarters. This is also a good opportunity for investors to create filters to select quality businesses.

Regarding the criteria for selecting real estate stocks at this time , Mr. Bui Tien Duc gave 3 suggestions (1) Product and sales capacity. This is the most important criterion because when the market is frozen, businesses that can meet real needs can still conduct business and ensure operating cash flow in the near future. (2) Financial leverage is also important because this can be said to be a deliberate screening, so businesses with healthy financial health, reducing leverage to a safe level will be a good choice. (3) Clean land fund is also a necessary factor to be able to implement new projects in the future. (4) Sales strategy should also be noted.

Ha Anh/Market life