JOHANNESBURG - Industry analysts said that there was a lot of nervousness and panicking in the market after property stocks took a dive on the rumours that Viceroy Research’s next target is a South African property company.
Greenbay Properties declined by 30percent on Thursday after the rumours, but recovered and was down by 5.33percent at the end of the day.
Nepi Rockcastle as well as Fortress Reit A were also affected by the rumours when their stocks traded lower on the day.
Resilient Reit fell as much as 19percent before recovering and closed at R12.80 a share after dropping to R10.58 on Thursday morning.
However, the stocks were in a positive territory for the better part of Friday and traded marginally higher.
Resilient was up by 0.7percent while Greenbay Properties traded higher at more than 2percent and Fortress Reit A was up by 3.04percent.
Important
Brad Preston, the head of listed investments at Mergence Investment Managers, said that it was important to note that there was a lot of nervousness in the market at the moment, particularly in a week that is traditionally quiet and trading volumes are traditionally low.
“First of all, there is no more than rumour on any of these companies at this point.
"The reason the Resilient group of companies are seen as potentially vulnerable is based on the following: the companies are very highly priced, trading at a premium to their net asset values; the complex corporate structure and cross holdings add complexity to the group and may exacerbate moves higher or lower in the share prices and lastly, the group companies have raised lots of equity over the past few years, at high share prices,” Preston said.
Lesiba Ledwaba, the head of property portfolio management at Ashburton Investments, said the market was clearly very jittery following the Steinhoff debacle and reacting on rumour.
“The trading updates released by the stable reaffirmed their expected distributions growth and has stabilised the share price reactions,” Ledwaba said.