Indian capital gains

Ireo Gurgaon Hills

Ireo Gurgaon Hills

Despite the dull mood in the Indian real estate market and a general slowdown in sales, record transactions continue unabated for upscale properties in the country’s capital. Super prime properties in New Delhi’s prime areas seem immune to recession, a point proved by a recent spate of high value transactions.

The chairman of ITC, India’s multi-business conglomerate, which has a presence in FMCG, Hotels, Agri Business and Information Technology, bought a bungalow at the prestigious Shanti Niketan area for IR85 Cr (US$15 million). In addition to this high profile purchase, Torrent Group’s chairman also bought a bungalow on Dharam Marg in Chanakyapuri for IR111 Cr (US$20 million), Bharti Enterprises vice-chairman Rajan Bharti Mittal won the bid for a 0.7-acre litigated property on Amrita Shergill Marg for Rs156 Cr (US$28 million). Development company Tata Housing also paid Rs 218 (US$38 million) for a one acre bungalow on Hailey Road.

The purchases were all in areas at the heart of New Delhi and considered by locals as “green”, “serene” and “well connected”. These neighbourhoods are supported by physical and social infrastructure, and located close to markets, schools, hospitals, restaurants and hotels.

Read more: Property Report

Economy

Easier entry likely for foreign investors

India is considering an overhaul of entry norms for foreign investors, including a single-window clearance for approvals, as part of steps to boost capital inflows that can help shrink its record high current account deficit.

India is considering an overhaul of entry norms for foreign investors, including a single-window clearance for approvals.

The steps being deliberated include allowing entry to all foreign investors, barring venture capital funds, through a single window without having to register with market regulator Sebi, and a risk-based approach to know your customer norms, a person close to the development told ET.

These are part of the recommendations made by a Sebi-appointed panel. The rupee hit a record low of 58.17 against the dollar on Monday, escalating worries about the country’s current account deficit, which is estimated to be around 5% in the fiscal year ended March.

The panel, which is expected to submit its report in the next two days, has suggested a major overhaul of the entry norms and recommended allowing investors from countries that are compliant with the International Organisation of Securities Commissions, or whose stock market regulator has a memorandum of understanding with Sebi or the central bank with Bank of International Settlements.

Read more: The Economic Times

Govt planning to eliminate FDI cap in telecom

India plans to eliminate the cap on foreign direct investment (FDI) in telecommunication sector and raise the limit in defence to lure funds and boost the rupee, two finance ministry officials with direct knowledge of the matter said.

Overseas investors would be able to own all of a telecom company, up from 74% currently, with the ceiling in defence rising to 49% from 26%, the officials said, asking not to be identified as the information isn’t public. The changes are expected to be announced late June or early July, they said.

Finance minister P. Chidambaram said in March a review of FDI caps had begun, part of a government push to woo capital, fund a record current-account deficit and revive economic growth. The imbalance in the broadest measure of trade has weighed on the rupee, which plunged to its weakest level on record this week.

Telecom and defence are the two major areas of the economy where investment caps are set to be eased, the officials said. Minor adjustments may be made in other industries, they said, without giving further details.

Read more: Mint

Rupee weakens to almost 59 a dollar, recovers

The rupee, which on Tuesday fell to almost 59 a dollar, bounced back to close at 58.40 — 26 paise, or 0.44 per cent, weaker than yesterday’s all-time closing low of 58.14 a dollar — after, market participants claimed, the Reserve Bank of India (RBI) intervened in the foreign exchange market to sell dollars. According to dealers, the central bank’s move came when the rupee was trading at 58.93 and there was dollar selling from exporters that pulled the rupee back from the day’s low.

RBI has been cautious in its intervention due to the depleting foreign exchange reserves, which have come down by $5 billion since the start of the financial year (see chart). The rupee has fallen 8.5 per cent during the period and 3.34 per cent this month.

“RBI’s strategy of not selling dollars, against the trend, might not be effective. The idea is to choose the level where the demand-supply equilibrium sets in, with importers in a withdrawal mode and exporters in a hurry to absorb excess weakness of the rupee. The currency’s bearish mood reversed a little at 58.80-59.00, making it attractive for exporters, and RBI was seen joining the exporters in their selling spree to guide the correction to 58.43,” said J Moses Harding, head (Alco and economic & market research) IndusInd Bank.

Read more: Business Standard

Infrastructure

Industrial corridor brightens development prospects in border areas

The recently announced Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC) has brightened the industry’s hopes of development in the border districts of Punjab. The industry leaders believe that to give a further impetus, interest rate for the small and medium enterprises (SMEs) should be reduced.

Shawl Club (India) general secretary Piara Lal Seth told TOI on Monday that “the ADKIC will usher a new era of development even in the backward regions of border districts of Punjab”. He said the ADKIC will not only provide jobs but will also opportunities for industry in the northern region including Punjab.

He said that the new infrastructure which would be set up for the ADKIC will give a major push to the industry and trade. General secretary, Textiles Manufacturers Association, H S Makhni said that India had about 4.88 crore SMEs which employed 8.11 crore people and the sector had the potential to grow at an exceptional rate to become one of the primary driver of the Indian economy as it was already contributing upto 9% of the GDP and 36% to the total exports.

Read more: The Economic Times

Employment

Hiring up 10% in May’13; dips 4% m-o-m basis: Naukri

Naukri Job speak index went up 10.3% to 1,317 in May 2013 when compared to May’12 at 1,194, however the index is 4% down in May 2013 is comparison to April 13′. Among the metros, most of the cities have seen a similar trend barring Pune, Mumbai and Chennai. While Delhi-NCR has seen an impressive 26% increase in hiring, Mumbai has declined by 10% in May’13 over May’12.

Among the top 10 sectors, sectors like Pharma, IT, ITES have seen an increase by 25%, 8% and 56% in May13 while a few other sectors like Auto, Insurance, Oil & Gas have seen a dip over the same period.

Ambarish Raghuvanshi, CFO Info Edge (India) said, “A holistic view over the year shows us that jobs continue to be created as there is a 10% upswing in hiring y-o-y.  Overall it is a positive sign; however, employers seem to be following a cautious approach now and are keeping a close watch on the macroeconomic environment. Given the weak economic environment in 2012-13, any job creation is a positive sign. From this point onwards, job creation will track macro-economic indicators.”

ITES and healthcare have emerged as strong sectors registering a growth of 56% and 47% in May’13 in comparison to May’12. IT, banking and financial services, real estate and pharma have also seen an increase in hiring numbers over the year by 7%, 23%, 42% and 25% respectively.

Read more: My Iris

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