EMs showing widely diverging performances: Marc Faber

In an interview with ET Now, Marc Faber, editor and publisher of ‘The Gloom, Boom & Doom Report’, shares his views on the emerging markets in general and the Indian markets in particular as well as the rupee. Excerpts:

ET Now: Now that the emerging markets have corrected, do you think it is time to revisit emerging market equities or global equities?

Marc Faber: We have to look at each emerging market separately because of the diverging performances. Since 2009 we have seen great performances in the Philippines, Malaysia, Indonesia and Thailand, where markets went up by three to four times. On the other hand are markets like India, Brazil or Russia, which are still down in dollar terms by 50% from their highs. Therefore, each emerging market is in a different position at the moment.

In my view, there has been a huge correction in Indonesia and Thailand from the recent highs. The market is down by around 30-35% from the April-May high, but following a rebound, we will see further weakness.

Indian stocks, because of the currency weakness, have already experienced a very substantial bear market. It may last a little longer, but we surely are coming into a buying range.

Read more: The Economic Times

Amenities play an important role in offering quality living

Amenities play a major role while choosing a property. In real estate, amenities are features such as location, outlook or access to a park, lake, highway, view or the like, which enhance the desirability of real estate and which contribute to the pleasure and enjoyment of the occupants. There is a strong connection between the quality of social infrastructure and the well being of the new residents of any project.

Escalating stress levels involved in the professional life along with the inconvenience of travelling have led to the need for amenities in residential projects and thus the feeling that a home should be more than just a place to arrive after work, a personal haven where you can do what you want and enjoy it in the best possible way.

What brings a sense of community identity and belonging in a society or a residential project is engaging people in some form and that’s where amenities play an important role.

Considering the fact that there are people of all age groups with us, we take care of all needs – kids play area and swimming pool to sporting and gym faculties to gardens for senior citizens and a lot of landscaped area, whereby people can enjoy these facilities (the greens) in the heart of the city.

Source: The Economic Times

Home rule: Property prices shoot up 50-150% since 2008 even as realty stocks nosedive

Invest in their apartments, and you will get rich. But invest in their shares and you will be poorer. Unlike in other sectors, values of shares of listed real estate companies do not reflect the growing value of their products.

Sample this: Investments made in shares of real estate companies like Delhi-based UnitechBSE 3.65 % and DLF, Mumbai-based Indiabulls Real EstateBSE 7.80 % or Bangalore-based Purvankara in 2008 would have crashed to half or to a fifth of their value by now whereas in the same period, returns from investments made in homes built by the same companies would have risen anywhere between 50% and 150% or more.

If one had bought an apartment in any Gurgaon-based apartment building of DLFBSE 8.89 % — India’s biggest builder — in 2008, the investment would have, by now, appreciated 60-175%. Had the same money been used to purchase DLF’s shares the same year, that investment would have eroded to just 20%. Investors of Unitech, Indiabulls and other real estate firms would have a similar story to tell.

Read more: The Economic Times

Realtors divided on home-loan circular by RBI

Real estate developers gave out mixed reactions on Wednesday over the Reserve Bank of India’s circular cautioning banks against innovative housing loan products like the 80:20 and 75:25 schemes. Some loathed, while some welcomed the move.

Under these schemes, a property buyer makes an upfront payment of 20% of the apartment price, and the remaining has to be paid at the time of possession of the property. The buyer can purchase the property through bank finance, in which case there is a tripartite agreement between the banks, developer and the buyer. In such cases, the developer then gets that 80% from the bank upfront and pays interest on the loan till the buyer gets the possession of the property. Similar is the case with 75:25 scheme.

However, the fear is that developers might be getting these loans at individual loan rates rather than corporate rates prescribed for risky sectors like real estate.

Developers say such schemes were helping in checking property prices and the customer was free from the risk of EMI burden accumulating in case the project was delayed for any reasons, and so the scheme was giving a fillip to the sales as well as providing cash flows to realty companies to complete projects.

Read more: Financial Express

Economy

Why some foreign investors are buying India

It flies in the face of conventional wisdom to bet on a country with a currency tumbling to record lows and a government that is clutching at straws to deal with India’s worst economic turmoil since its balance of payment crisis in 1991.

Yet to some financial firms such as Ashmore Group in London the panic gripping India ignores an economy that, although slowing sharply, is far from collapse.

So much hand-wringing over the state of the economy today masks the long-term compelling play that attracted many foreign investors to India in the first place, including a young, urbanising population that will drive consumer demand and an economy that is increasingly diversifying into exports.

“The market is obviously currently gripped in a sense of panic and, as such, it is not paying a lot of attention to the underlying fundamentals,” said Jan Dehn, head of research at Ashmore Group in London, which manages $80 billion worldwide.

“What happens in these situations is that where the market has gone and what actually exists on the ground in reality have parted ways with each other.”

The case against India is not hard to make.

Investment has melted away and data is pointing to a plunge in manufacturing and service-sector output. At the same time, the current account deficit is at a record high, a stubborn fiscal deficit has raised the risk of sovereign rating downgrades, and the RBI’s recent cash-draining steps threaten to raise borrowing costs across the economy.

Read more: Reuters

World stocks rise on US employment data

World stock markets were mostly higher on Thursday after several pieces of data pointed toward a strengthening labor market in the US, and European Central Bank President Mario Draghi repeated his commitment to keeping interest rates low.

‘Our monetary policy stance will remain accommodative for as long as necessary,’ Draghi said after the ECB’s governing council kept its key lending rate for banks unchanged at 0.5 per cent.

The euro sank as Draghi spoke, falling to $1.3125 from above $1.32 earlier in the day. By the end of trading in Europe on Thursday, it had slipped further to $1.3118. US markets opened higher after the Labor Department said jobless claims declined in the last week of August and the ADP Research Institute said the private sector added 176,000 jobs in August.

‘Companies of all sizes expanded their payrolls over the previous month,’ said ADP president Carlos Rodriguez.

The Dow Jones Industrial Index gained 0.1 per cent to 14,940.47, and the broader S&P 500 rose 0.2 per cent to 1,655.76.

Read more: The Economic Times

NRIs

Federal Bank expects Rs 32,000 crore NRI remittances in FY14

With the rupee volatility continuing, Kerala Headquartered Federal BankBSE 12.38 % is expecting NRI remittances through “its engine” touching Rs 32,000 crore this fiscal, a top bank official today said.

During 2012-13, NRI remittances through the bank was Rs 28,000 crore, of which about 60 per cent came to the bank and the remaining went to the other banks in the state, A Surendran, General Manager, Head-Retail and International Banking, told reporters here.

Within the last five months of this fiscal, already 75 per cent of the remittances collected last year has been received, he said.

“It all depends how the rupee behaves. If the trend continues, the remittances could further go up,” he said when asked if the remittances would climb further.

The bank has already hiked the interest rates for three year NRE deposits to 9.5 per cent from 8.75 per cent.

Of the foreign remittances coming to Kerala, 80 per cent is from the Gulf, he said.

Source: The Economic Times

Energy

Use the society’s terrace to harness solar power

Besides cutting energy bills, a study revealed that ‘green buildings’ recover more than half the money in three to five years. An eco-friendly home need not just be a concept on paper deterred by price realities. Recent research by The Energy Resources Institute (TERI) on financial feasibility of such houses, revealed that though construction costs are 17 to 30 per cent higher than conventional buildings, they recover the money in three to five years, besides saving more than 52 per cent in power bills.

Of late, many societies all over the city have been investing in various forms of solar energy to cut their maintenance costs, in addition to doing their bit towards keeping their environment green. One of the most attractive features of solar energy is that after a one-time payment, the cost of these appliances turn out to be virtually nil, with no recurring monthly maintenance bills. Out of the many solar energy appliances being used, solar outdoor lighting is one of the most popular products doing the rounds in the city. Most societies across the central suburbs of Mumbai – from Mulund to Navi Mumbai and Thane, have large society premises. These premises need plenty of outdoor lighting arrangements and quite a few societies from these areas, have opted for solar outdoor lighting products to keep their maintenance costs low.

Read more: The Economic Times

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