CROSS-EXCHANGE ANALYSIS OF STOCK PERFORMANCE BETWEEN REAL ESTATE AND CONSTRUCTION SECTOR : CASE OF VIETNAM STOCK MARKET

Abstract

Vietnam securities market in general and stock market in particular has been developing for the past decade to facilitate the fast economic growth, which drives a large number of companies, especially those in Construction and Real estate sectors, to go listed for capital raising purpose. Nevertheless, investors in the two sectors take more caution about their stock performance since both Vietnam stock market the sectors are young in their development stage. Hence, the research studies about the stock performance of Real estate vis-à-vis Construction firms on each of the two Vietnam stock exchanges: Hanoi Stock Exchange (HNX) and Hochiminh Stock Exchange (HOSE). Methodologies employed include One-way ANOVA and Paired Samples T-test to compare the difference in monthly average portfolio returns of each group; Linear Regression to analyze the sensitivity (beta) of each portfolio to the market index; and cross-exchange Multiple Linear Regression to examine the impact that various factors related to firms within Real estate and Construction field imposes on their IPO first day returns. Results show the statistically significant higher monthly stock performance of Real estate sector compared to Construction sector, regardless of the stock exchange. Real estate group also exhibits lower correlation between its monthly excess returns and market excess returns. In addition, the Sector factor (being Real estate or Construction) also matters most to the IPO first day performance of a company listed on either exchange. The research therefore aims to provide investors with useful insights into the particular stock behaviors of listed Real estate business enterprises in Vietnam stock market for a sound investment decision.