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Traders betting on LAND and CDC benefiting from low interest rate regime

Shares of home developers City & Land Developers (LAND) and Cityland Development (CDC) jumped 22.79% and 17.95% respectively on 30 March 2021. LAND is a subsidiary of CDC. Both companies are mostly into residential development.

Trading of LAND and CDC registered volumes far above 65-day averages. The sudden interest on LAND and CDC by investors and traders could be driven by the notion that the low interest rate regime will be here to stay. And that the low interest rate regime is a boon to residential developers. A low interest rate regime lowers the monthly amortization of residential loans placing the residential units within reach by the masses. A low interest rate could spur demand for LAND and CDC residential development projects.

Investors and traders have done their research and may have chosen LAND and CDC to bet on for their below book value valuations. LAND has a price to book value ratio of 0.89 while CDC has a price to book value of 0.4364.

Aside from their below book value valuations, both companies have market capitalization of below 4 Billion Pesos. LAND and CDC have market capitalization of 1.95 Billion and 3.65 Billion, respectively. LAND and CDC have respectable dividend yields of 2.15% and 3.66%, respectively.

Investors and traders betting on LAND and CDC believes that with their below book valuations and small capitalizations, LAND and CDC have more rooms for an uptrend.

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