Bid to boost corporate bond market

Ireo Skyon, Gurgaon

A panel of financial sector regulators headed by finance minister P. Chidambaram today discussed steps required to promote the corporate bond market to help India Inc access long-term funds.
“The council discussed a number of steps to be taken for rationalising the framework for regulation of corporate debt in order to remove regulatory constraints for issuers and protect investors, encourage participation of long-term investors, reduce cost of public issuance and increase liquidity by improving the market infrastructure,” an official release said.

The corporate debt market is relatively underdeveloped mainly on account of a string of failures by private firms to pay back debt bought by retail coupon holders and use of a cumbersome company law process to reschedule debt paybacks.

The government believes a developed corporate bond market provides additional avenues to companies for raising funds in a cost-effective manner and reduces reliance on bank financing.

Read more: Telegraph India

Metro Rail will fuel real estate growth

Trends the world over have shown that cities tend to get reoriented to mass transit systems and property prices in these corridors behave differently, remarked Hyderabad Metro Rail (HMR) Managing Director N.V.S. Reddy on Saturday.

Participating in a conference ‘Real Estate: Accelerating The Growth Story’, organised as part of the AP Real Estate Developers’ Association (APREDA) Property Show-2012, Mr. Reddy said the same was expected of the Metro Rail project as Transit Oriented Development (TOD) was being planned in the city. “Once the project shapes up, growth will happen in the eastern parts of the city,” he said.

The Hyderabad Metropolitan Development Authority (HMDA) Commissioner, Neerabh Kumar Prasad, stressed the need to reduce the land cost component in projects and make available affordable housing that comes with a price tag of less than Rs. 20 lakh. “There is a large segment looking for affordable housing and real estate should find ways to address their needs,” he said.

Read more: The Hindu

NHAI to start projects after land acquisition

At a time when private bidders are showing interest in highway projects, National Highways Authority of India ( NHAI) has decided on rolling out projects only after they have substantial land required for the project and are given environmental clearance.

Senior authority officials said that this is a conscious decision, taken considering that projects get exceptionally delayed due to non-availability of land and green clearances. “Now there is a message from the top that we must get things under control by the time project starts. Small stretches of incomplete roads jeopardize the entire project,” said an official. He added that the focus is now to ensure that once a project starts on ground there should be no brake and the objective is timely completion of works.

Read more: The Times of India

NRIs

Financial planning: Importance of life insurance for NRIs

Indians have spread virtually to every corner of the globe and have made their mark in the chosen line of business or profession. As an Indian living abroad, it definitely makes a good financial sense to connect with the roots of your lineage and make wise investments back at home, especially when the country is in a developing phase.

Whether you are pursuing a dream job abroad and at some point wish to settle back in India post retirement, or if you have ageing parents living on their own in India and are dependent on you for financial support, it is prudent to take calibrated financial decisions — especially at a time when uncertain economic conditions are prevailing in the more developed countries. It is also imperative to provide for long-term security and achieve financial goals for you and your dependents.

Read more: The Economic Times

Economy

October inflation surprises; slowest in 8 months

A labourer sits in front of stacked sacks of onions at a wholesale vegetable market on the outskirts of Jammu November 14, 2012. REUTERS/Mukesh Gupta

India’s headline inflation unexpectedly eased to its slowest pace in eight months in October, a welcome relief from a string of bad data but still high enough to be a headache for policymakers struggling to balance the need for growth with taming prices.

Wholesale prices – India’s main inflation gauge – rose an annual 7.45 percent, the slowest pace since February, government data released on Wednesday showed.

The figure was slower than the 7.81 percent recorded in September, as food and fuel prices rose less quickly, and less than the 7.96 percent predicted in a Reuters poll of analysts.

With India’s economy on track to grow at its worst pace in a decade, and a general election due in just over a year, the government has been pressing the Reserve Bank of India (RBI) to cut interest rates to revive growth. But the central bank has rebuffed those calls, saying prices are still rising too fast to risk loosening policy.

Read more: Reuters

Banking

Karnataka Bank has reduced its base rate by 25 basis points with effect from November 10.

The bank’s base rate now stands reduced to 10.75 per cent from the earlier 11 per cent. As a result, all its base rate linked loans get cheaper by 25 basis points.

A bank release said here on Saturday that the reduction is applicable to the existing loans and also for the future loans. This will enable retail and MSME customers to avail funds at reduced rates.

The bank has reduced the interest rates on housing loan and car loan products by 50 basis points.

The release said the housing loan up to Rs 25 lakh will be extended at the rate of 10.75 per cent.

The revised rate of interest on car loan is 11.25 per cent.

The bank said that there is a corresponding reduction in the rate of interest on deposit by 25 basis points.

See article: Business Line

Education

Higher education sector needs more FDI: Deloitte report

It is important for foreign investment and experience to flow in this sector in order to transform the domestic higher education institutions into the world’s top league, Deloitte report says.

India, which has the third largest higher education system in the world in terms of enrolments, after China and the US, needs more FDI to meet its target of doubling the gross enrolment ratio (GER) by 2020, a global consultancy firm has said in its report.

“The private sector’s role in the higher education sector has been growing at a rapid pace over the last decade and needs to further expand at an accelerated rate in order to achieve the GER target,” Deloitte Touche Tohmatsu India said in a recent report titled ‘Indian Higher Education Sector: Opportunities aplenty, Growth unlimited’.

The government has set an aggressive target of achieving 30 per cent GER in higher education by 2020 from the current level of 15 per cent.

According to projections, the sector is expected to register a CAGR of 12 per cent from 2008 to reach a size of $31.47 billion.

According to Deloitte, as per the recent estimates by National University of Educational Planning and Administration (NUPEA), in order to achieve this target, an additional investment of $190 billion which includes capital expenditure and operating expenditure, has to be made in the next eight years.

Read more: Business Line

Retail

From new cars to iPads, product launches flood Indian market this Diwali

Indian retailers hope to boost disappointing consumer spending with a frenzy of special offers during this week’s Diwali festival, led by automakers crowding the market with nearly 20 new cars.

Diwali, the Hindu festival of lights, has always been an auspicious time to splurge, sparking an annual race between retailers to provide the most attractive offers.

But in this year’s flagging economy, overcoming consumers’ trepidation may prove to be a difficult task.

“I haven’t seen so many product launches in a short span of days ever,” said Ankur Bisen, vice-president in retail with Technopak, an Indian consultancy firm.

“Cars, luxury jewellery, watches, tablets, iPads, even Microsoft’s Windows 8, retailers are trying new product launches to attract consumers,” he told AFP.

Months of gloom for the Indian economy have brought consumer spending down to seven year lows, according to the Fitch ratings agency, so businesses are desperately seeking a kickstart.

Read more: The Economic Times

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