Analysts: It's just a matter of time until builders' stocks rebound

In most of the cases, construction firms saw their turnover plunge in the first half of the year, but analysts count on a rally starting next year.
Construction companies and building materials producers listed on the Bucharest Stock Exchange in the second quarter witnessed further turnover declines, but analysts believe investors should keep an eye on these companies as starting next year, amid resumed lending, their stocks are likely to be among the first to post increases.
“Such a field is interesting given the housing shortage. The value of mortgage lending in GDP stands below 5%, a very low level. Should the economy become solvent, constructions and building materials firms will be among the first to benefit from thawed-up lending as there is demand even now. Under the circumstances, investors should be watching them to catch the moment the economy revives, probably in the second half of 2011. It is just a matter of time,” says Mihai Căruntu, head of BCR’s capital market research department.
According to him, listed construction companies are generally valued at around half their book value, pointing to a significant potential should their profitability pick up.