Deflates negotiation of real estate funds

Shares fall in price to less liquidity in the stock exchange.

To sell a title involving a real estate fund at this time is necessary to have a little patience, and if the urgency is great, be prepared to decrease in price.

The negotiation of this type of security has undergone a drastic fall in the last five months, attributed to reduced liquidity in the secondary market.

Data from the National Stock Exchange (BNV) indicate that the average daily transactions fell 73% since October 2008. This decline is particularly evident in the trading month.

Since before the shares of real estate funds were not among the most liquid instruments. However, something that added pressure to the market is that there’s a waiting list for sale.

For example, on Monday, March 30, during the session bag, were for sale 350 titles of the different funds available, in 38 deals. That day just closed 6 transactions in 50 securities.

The governor general values, Eddy Rodriguez, explained that this is due to tensions caused by a lack of liquidity in the stock market, following the crisis in the United States and other developed markets.
However, even if the total amount negotiated in the BNV has tended to improve since last December, the transaction of shares fell 11.6% in the same period.

Row output

In some cases, investors who have come to sell these shares have had to rely on real estate prices lower than those observed a few months ago.

In the case of Banco de Costa Rica Real Estate fund, the titles went from an average price of $ 6114 in March 2008 to $ 4893 in March 2009, 20% less. In the Fund Crestones of Improsa SAFI, the reduction was 30%.

The involvement of the latter fund was negotiated for $ 3800 in late March, that price is below $ 5011 which indicates their book value.

500 shares were sold on April 2. La ofertas de compra llegaban a 50.

The offer came to buy 50.

1 complaint received on real estate funds over the past six months.

For the manager of the BNV, Jose Rafael Brenes, funds closed, and in particular the real estate are affected by the preference of investors to short-term instruments and greater liquidity.

“This situation will further affect the values that under normal conditions tend to be less liquid, such as stocks and shares of funds,” said Brenes.

Behind the deals for buying and selling every day appear on the screens, there could be a greater number of investors lining up.

Allan Rodriguez, manager of investment advisory E3 Corp, said that what goes into the system is only part of the intentions that drive investors.

This specialist agreed that the product could lose competitiveness in relation to other alternative investments less risky and more liquid.

The question is whether the deterioration of that attraction is permanent or temporary. Fernando Estrada, INS Securities analyst, said that following the crisis some investors have lost faith in real estate funds.

“They worry that the valuations are unreasonable, but if you ask the managers, they say they have been conservative,” he said.

He added that they are not recommending the purchase of real estate funds because there are instruments with comparable yields and improved liquidity, yet they see no cause for alarm if someone has the funds.

The fact is that more people are pushed out of their holdings need for urgent cash, and then exposed to a capital loss if you bought at high prices.

However, Estrada believes for those long term investors could be an opportunity to glimpse a bargain.