MARKET TALK: Lombard Odier, poor growth properties

The real estate stocks showed an increase of 90% from 9 March, driven by the UK market (+118%), Asia (+108%) and USA (+104%), outperforming global markets 35% (compared with the MSCI World). This was announced by a firm of Lombard Odier. At the same time, the value of direct capital market continues to be in decline, analysts reported a drop of 36% from its peak in August 2009 in the United Kingdom and 29% from the peak in June 2008 in the U.S.. The rise and 'was in part driven by the normalization of the returns on risky assets, including securities of companies' listed property, when and' was clear that the worst had passed. The rise of the sector has benefited from the recovery in stock prices, in particular the financial statements. So 'as in the financial sector, real estate stocks most' at risk have expanded outperformed defensive, reflecting the transition from investor aversion to risk tolerance. Evaluations on real estate stocks are positive, with the global market share with a premium compared to the fundamental, particularly in the UK (+6% compared to an average 12%) and on a larger scale, in the U.S. (+20% compared to 0% long term). According to some, prices are discounting the expected increase in real value of assets. Disagree analysts at Lombard Odier in the short term, in fact, the value of their capital and 'falling in the U.S. where a correction on the prices of real estate and' started with a delay and now is intensifying. The stabilization of capital value, is affecting all of continental Europe though with considerable differences between countries. However, the rental market remains under pressure because of rising unemployment. The decline in rents is proceeding at a pace and results inevitably in a downward pressure on prices. Probably, say the analysts, the United Kingdom and 'near a turning point, the rental market is slowly improving, so' as the credit market, however, access to capital and refinancings continue to be difficult to achieve, the signals that suggest that the recovery process will 'slow. The study of Lombard Odier, that real estate stocks are not particularly attractive at current levels, the sector appears to have no more chance 'of growth. Analysts therefore recommend caution especially on financial statements. Instead the direct property market attracts, especially the UK, given the leading position in the sky.