Sell-off in gold may re-allocate funds to real estate, equities: Shashank Khade, Kotak AMC

Ireo Victory Valley, Gurgaon

Ireo Victory Valley, Gurgaon

ET Now: What is your view about the sell-off in gold?

Shashank Khade: There are three alternative asset classes for Indian investors to invest in – gold, real estate and fixed income. %20%28%22Equity%20should%20get%20some%20bit%20of%20the%20allocation%20at%20a%20later%20date.%20This%20is%20a%20good%20sign%20for%20asset%20allocations%20to%20start%20shifting%20from%20one%20asset%20to%20the%20other%2C%22%20Khade%20said.%29

Clearly, gold has started giving some heartburn to Indian investors after a very long time. In fact, the Indian investors or consumers who have been accumulating gold substantially, this is the first year where they are seeing a period of negative returns after a very long time.

So, this augurs well for an asset class like equity at some point in time because the asset allocation may start switching over to the other asset classes like fixed income and real estate.

Equity should get some bit of the allocation at a later date, maybe a year or 1.5 years down the line. This is a good sign for asset allocations to start shifting from one asset to the other and if the import of gold actually slows down from here, it alleviates the pain to a large extent on the current account deficit side also.

Read more: The Economic Times

HUDA eases upper time limit on plot construction

Haryana Urban Development Authority has done away with the upper time limit for completing minimum construction on residential and commercial plots.

“There shall be no upper limit of the time within which the allottee is required to complete the minimum required construction,” a HUDA spokesman has said.

Earlier, the allottee was required to complete the minimum construction within 2 years from the date of possession.

He said that after the expiry of 12th year, further extension in period of construction would be allowed on payment of extension fee at double the rates of the previous year.

However, this would not apply to plot sizes upto 100 square meters for which the rates would remain the same as in the 12th year unless and until increased by the authority.

He said in respect of commercial sites up to two storey or more than two storey the rates for extension fee would be two times or three times of the rates for residential plots, respectively.

Read more: The Economic Times

Boom town: Circle rates go up again

The district administration has announced fresh circle rates applicable from April 1. The revised rates follow the earlier trend of average raise by up to 15%.

Circle rate is the minimum rate at which a property can be bought or sold and prevents buyers and sellers from paying less stamp duty by showing reduced value of property deals. Higher circle rates increase property registration costs as buyers need to spend more as stamp duty charges.

According to the district revenue department, in 2012-13 the total stamp duty collected was Rs 12.2 billion while Rs 0.45 billion was collected as registration fee for immovable property. The figures were even more higher for 2011-12 when the stamp duty collection was worth Rs 14 billion while the registration fee collected was Rs 0.46 billion.

As per new rates, value of land up to two acres along NH-8 and the Northern Peripheral Road (Dwarka Expressway) will increase by 20%. Similarly, land up to two acres in size along Gurgaon-Sohna Road and Gurgaon-Pataudi Road will jump by 10%. The revision will also further push the existing market rates of all residential, commercial and agricultural property or land.

Read more: The Times of India

Banking

GST, DTC, interest rate cuts to boost economy: CII chief

The newly elected president of the Confederation of Indian Industry (CII), Kris Gopalakrishnan, on Monday urged the Reserve Bank of India (RBI) to cut interest rates by 1% to attract investment and take forward the reform measures to accelerate economic growth.

Besides early implementation of the Goods and Services Tax (GST) and Direct Taxes Code (DTC), Gopalakrishnan said that it is essential to kick-start investment to revive economic growth and to take the expansion rate to 8-9% in the next two years.

“RBI needs to work in tandem with the government in boosting growth by easing interest rates by at least 100 bps in the current fiscal. Steps like early implementation of GST would help in adding 1-1.5% in the GDP,” he said. For the current fiscal, CII has projected a growth rate of 6-6.4 %.

RBI had cut its key rates in January this year to rein in rising inflation, which, on Monday, fell to a three-year low of 5.96%. “There are certain things that we can do at the domestic level to boost economic growth. We cannot do much (to improve) the external factors. Supply side constraints is the main reason for inflation and reduction in interest rates would help in enhancing investments and increase in boosting capacity,” he added.

Read more: Financial Express

RBI working on improving on housing finance database

%20%28RBI%20working%20on%20improving%20on%20housing%20finance%20database%29The Reserve Bank is working on further broad basing its home price data base so that it can monitor among others loan to value ratio , EMI or equated monthly instalments to income ratio, a top RBI official said. These are the parameters which are crucial to assess individual affordability of home loan and its repayments.

” The Reserve Bank is also developing a housing asset price monitoring system covering such details as LTV ratio, EMI to income ratio and price to income ratio based on housing loan data from select cities collected from select banks and HFCs.” Said Deepak Mohanty, executive director, RBI at an international seminar orgainsed by the National Housing Bank last week.

Currently there are two house price indices or HPIs available in the public domain. One is the National Housing Bank’s NHB-Residex compiled on survey based information for 20 cities. The second one is RBI-HPI based on registration prices information for 9 cities.

RBI’s work of compilation of a HPI was initiated by the central bank in 2007, said Mohanty. It began with Mumbai city. Subsequently, the coverage has been extended to eight more cities: Delhi, Chennai, Kolkata, Bengaluru, Lucknow, Ahmadabad, Jaipur and Kanpur. Apart from data for individual cities, a composite HPI covering these 9 cities is currently being is released by the central bank on a quarterly basis. As per the Reserve Bank’s composite HPI, house prices have nearly doubled since 2008-09.

Read more: The Economic Times

Economy

India-EU free trade pact likely to be signed before year-end

Crucial talks between India and the European Union on their proposed free trade agreement (FTA) get under way here amid new optimism that a deal could be reached before the end of this year.

Union Commerce and Industry Minister Anand Sharma is scheduled to meet EU trade commissioner Karel De Gucht and other top officials later in the day in an attempt to take forward the six-year long negotiations.

The talks are currently bogged down in disputes over EU demands to raise the equity cap on FDI in India’s insurance sector, reducing the tariffs on import of automobiles, protection of intellectual property rights (IPR) and other issues.

India has been seeking greater access for its services sector in the 27-nation EU and it is also concerned that the EU demands for stricter implementation of the IPR rules might affect the country’s generic industry or force the country to amend its patent law.

Investment protection clause

India’s demands for granting data secure status by the EU and incorporating an investment protection clause in the FTA are expected to figure in the discussions here on Monday.

Read more: Business Line

Infrastructure

L&T, Leighton Welspun, Uniquest Infra may now bid for largest projects

Larsen and Toubro Infrastructure Development Projects, Leighton Welspun Contractors, Uniquest Infra Ventures, Reliance Infrastructure, have emerged as developers who can bid for largest national highway projects.

The National Highways Authority of India (NHAI) has recently circulated the annual qualification list for 2013 for 61 bidders, including five for which the results were withheld primarily for some lack of documents, said a NHAI source.

Process

Under the annual pre-qualification method, NHAI vets the project costs for which a developer or a consortium can bid, based on their experience.

The process usually takes place once a year.

Though, NHAI has added a rider that it has based these qualification points based on documents submitted by developers and not “counter-verified”.

Read more: Business Line

Energy

BHEL R&D arm to launch products for cheaper solar energy

First in the pipeline is a new solar thermal sun tracker — a system for tracking the sun from morning to evening to produced increased power output from the solar panels mounted on it.

The corporate R&D arm of power equipment maker BHEL is set to launch some products aimed at making solar power production cheaper.

First in the pipeline is a new solar thermal sun tracker — a system for tracking the sun from morning to evening to produced increased power output from the solar panels mounted on it.

“We are preparing to commercially launch this product in the next six to eight months. Our prototype has shown that the tracking system can generate 25-35 per cent additional energy in comparison to the conventional modules mounted on the fixed tilt structures,’’ S. Sekar, GM of BHEL’s corporate R&D arm.

Liquid balancing system

The operation of the sun tracker is based on a simple liquid balancing system. Hence, there are no motors, gears and control system for the operation.

The tracking is fully automatic and driven by the movement of liquid from one side of the panel array to the other side due to heat generated by solar energy.

“We are currently fixing this system in one of our existing solar units to test its operational and cost efficiencies,’’ he said.

Read more: Business Line

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