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Nordic Update

Real estate shares down for second week in a row

Publicerad: 12 oktober 2018, 10:54

Fastighetsnytt’s urban development index (FSBX) had dropped 0,6 percent by lunch on Friday and is down almost 4 percent this week.


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The index, which is constituted by Swedish companies in the real estate, construction and urban development sectors, has now plunged 8 percent since the global share sell-off began on Thursday last week, but it is still up 7 percent since the beginning of the year.

Swedish real estate shares had a strong run in July following strong quarterly earnings when they outperformed the rest of Europe by about 10 percentage points.

Construction firm Serneke, which warned last week it will post an operating loss in the third quarter, is this week’s worst performer with a drop of 19 percent.

Housing firm Prime Living is down 17 percent for the week. It is one of the biggest losers on the Nasdaq Stockholm exchange this year due to falling house prices and speculations about its capacity to finance its business.

Another housing firm, Magnolia Bostad, is down 12 percent this week. On Friday the Swedish bank SEB cut its recommendation on the share to sell from buy and lowered its target price to 50 SEK from the previous target 100 SEK.

According to the financial news agency Direkt, SEB sees a risk that delayed housing projects could lead to a negative domino effect which in turn could have a negative impact in 2019 and 2020.

Oskar von Bahr

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