BSEREALTY (3236) On Tuesday, October 27, 2009 we came with Realty Stocks - Really A Caution! When the Index was 4315 http://akprabhakar.blogspot.com/2009/10/realty-stocks-really-caution.html and later we gave a update on Tuesday, December 1, 2009 http://akprabhakar.blogspot.com/2009/12/update-on-realty-sector-bse-realty-3660.html and this sector has almost corrected more than 25% and still problems remain this sector did correct 5% from the budget day high 3376 to close around 3236 so I had collected few details why this sector saw huge sell-off with very high volumes in last one hour of trade on 26/Feb/2010 and few details and graph are attached
Hourly Graph: The below attached hourly graph clearly shows the sell-off in last one hour with very heavy volumes
Budget proposal:
1. One per cent interest subvention on housing loans up to Rs.10 lakh (where the cost of the house does not exceed Rs.20 lakh) to be extended till March 31, 2011.
2. Under section 80-IB(10), pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits. Relaxation of norms for built-up area of shops and other commercial establishments in housing projects (earlier 5%) to enable basic facilities for their residents.
http://indiabudget.nic.in/ub2010-11/fb/bill5.pdf construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer;”;
http://www.business-standard.com/india/storypage.php?autono=387068 The government yesterday brought transactions such as leasing vacant land and commercial spaces, payment made to developers before the grant of completion certificate and imposing preferred location charges among others under service tax net. The transactions now attract a service tax of 10.3 per cent. Developers complain that levying service tax on payments during construction will push up prices and reduce home sales.Technical view: BSEREALTY sector is moving in downward channel and till 3400 above close is not seen for few days weakness would be seen in this sector
http://economictimes.indiatimes.com/articleshow/5605438.cms Very slow pick-up in demand, execution risks for large projects, a rising risk of banks being asked to assign higher risk-weight to their real estate lending’s, and chances of oversupply of the stocks of realty companies through IPOs.
Caution: I am not a tax consultant so I don’t understand tax implication I have collected data’s available on the net and posted here this view just to add extra dimension and last hour selling in Realty stock made me to collect few details. Important these are budget proposal and they can be subject to changes as parliament will start to debate so please take informed decision http://prabhakar-views.blogspot.com/2010/02/be-informed-investor-in-informed-world.html
