India has the strength to handle volatility: Sonjoy Chatterjee, Chairman, Goldman Sachs, India

Sonjoy Chatterjee, chairman, Goldman Sachs (India), has been in the financial services sector for over two decades, both in India and overseas, and has seen the economic crisis in 1998 and 2008, besides the current slowdown. After wearing a lender’s hat in ICICI Bank from 1994 to 2011, Chatterjee left it as its UK chief to head investment bank Goldman Sachs’ India operations.

“The current environment is not optimal for equity issuances. Globally, due to volatility, the allocation of investments across emerging markets is almost at a standstill. When you think of equity markets, India has seen approximately $16 billion of investments since January. Unlike countries in South East Asia, which have seen almost all their inflows leave, India has barely seen $3 billion of outflow and that too is predominantly over the past two weeks. I think this is something to take comfort in,” he tells ET. When you talk about outflows, it is predominantly in the debt market… We should note and value the fact that, if global investors saw the future of India story as having fundamentally changed, the outflows in equities would also have been quite substantial, he says.

Is the India story completely beaten down?

India has been through many upheavals in the past. Today, there is indeed volatility in the currency and bond markets and to some extent the equity markets. However, when I think about India over the last two decades, I remember us being a far weaker country trying to deal with volatility in the 1990s, the Asian crisis of 1997 and then the difficulties of the early 2000s.

From a corporate point of view, I note that today the ability of banks to fund through these situations, the robust institutional framework and the government’s fiscal and monetary steps taken in the last few weeks, were things India was not equipped to do in the 1990s. So, yes, there is volatility, but, fundamentally, I think India is in a much stronger place today.

Read more: The Economic Times

Indian economy needs the FM and the new RBI Governor to match their steps

In a matter of few days Raghuram Rajan has acquired superstar status even as the Government and the RBI continue to look for ways to improve India’s economic fortunes. His maiden public speech as the new RBI Governor has evoked a positive response from markets, although some caution is warranted as the major structural economic issues are yet to be addressed.

The sudden spurt in optimism over Rajan’s arrival at Mint Street is reminiscent of India’s cricket great Sachin Tendulkar stepping out on the ground with his team in dire straits. Like Tendulkar, the new RBI chief also will have to carry the burden of expectations from a large Indian population. While Tendulkar is nearing the end of a highly successful career, Rajan is just beginning his arduous innings at RBI.

Read more: The Economic Times

RBI eases rules for foreign and NRI promoters to raise stake in listed firms

In a move to quicken dollar inflows, the Reserve Bank of India (RBI) has changed the rules to make it easier for foreign and NRI promoters to raise stake in listed Indian companies.

Offshore parents of such local companies can now freely purchase shares by using the services of registered Indian brokers. Such acquisition of shares can also be funded with dividend amounts paid by Indian companies to these non-resident promoters.

The new rule will apply to all non-resident entities, including non-resident Indians (NRIs).

Read more: The Economic Times

India’s IT-BPO industry in forefront

According to a recent report by Cushman & Wakefield, globally India continues to be the forerunner in the IT–BPO industry. However, a number of other South and South-east Asian countries are increasingly gaining share in the global IT-BPO Industry. India continues to outperform its counterparts – Philippines, China, Malaysia and other South Asian countries in the IT-BPO industry due to abundant availability of English speaking and qualified talent pool, good network infrastructure, higher cost arbitrage, rapidly growing domestic market, high quality of services delivered, reliable power network, stable political system, positive business environment that fosters Foreign Direct Investment (FDI) in the IT-BPO sector and global expansion of Indian IT firms. India’s advantage also lies in its strong domestic demand, the geographical diversity and the growth potential in Tier II and Tier III cities.

Read more:  The Times of India (Hyderabad edition) 

FDI up 6 percent to $ 10.87b in Jan-Jun 2013

FDI into India increased by 6 percent year-on-year to $ 10.87 billion during the first six months of this year. According to data from the Department of Industrial Policy and Promotion (DIPP), the country had received $ 10.27 billion of FDI in January-June, 2012. “FDI inflows have a positive impact by supplementing domestic capital, technology and skills of existing companies as well as through establishment of new companies,” an official in the DIPP said. Sectors that received large FDI inflows include hotels and tourism, pharmaceuticals, services, chemicals and construction. Most of the inflows came from Singapore, Mauritius, the Netherlands and the US. The official said the country would receive more and more foreign investment on the back of recent liberalisation in the FDI policy regime.

Read more:  Financial Chronicle  | The Economic Times | The Hindu Business Line | The Times of India | The Indian Express 

G20 summit takes note of India’s commitment to infra reforms

India’s commitment to continue with its ambitious infrastructure programme including the Delhi-Mumbai Industrial Corridor and setting up of two new major ports has been taken note of by G20 at its just concluded St. Petersburg summit.

The commitment has been reflected in the St. Petersburg Action Plan as the Group of 20 industrialised and major developing countries decided to reset its structural reforms agenda along more relevant, concrete, and well-targeted lines.

Prime Minister Manmohan Singh was among the world leaders who attended the two-day summit which concluded on Friday in the Russian city of St. Petersburg.

All the member countries have outlined their commitments on structural reforms to promote investment in a bid to lift potential growth, create jobs and contribute to needed global rebalancing, the Action Plan said.

Read more: The Economic Times

Real Estate Headlines

Investing in office space can help diversify your real estate portfolio

Investing in office space helps you diversify your real estate portfolio while earning regular rental income.

If you are a savvy investor who wants to diversify his real estate portfolio, office spaces can be a good bet. Investing in offices – one of the two components of commercial real estate, the other being retail – is a good way to earn high rental income and gain from capital appreciation.

TOP DESTINATIONS
There are many locations you can explore for investing in offices Some of the top ones recommended by real estate consultants include Delhi-NCR, Mumbai, Bangalore, Pune, Hyderabad and Chennai.

DELHI-NCR
It is one of the most important investment destinations in the country, also the biggest in terms of stock availability (around 110 million square feet at the beginning of 2013). Due to the large supply, it also has a high vacancy level, at present close to 20%, according to Knight Frank.

from Business Today

“In Delhi-NCR, capital values in commercial hubs have remained stable over the last few quarters. Therefore, investing in a pre-leased asset may be the best option, as it will generate revenue from the first day. Investors can also gain from the periodic increase in rentals that can be defined in lease agreements,” says Kumar of DTZ.

If you want to invest in under-construction office stock that is available at a lower price, you can explore properties expected to be delivered in the next two-three years.

“In Delhi-NCR, the peripheral locations of Gurgaon and Noida have consistently performed much better than the central and sub-urban areas. They have accounted for more than 80% uptake since 2009,” says Kumar of DTZ.

“Sohna Road in Gurgaon and Noida-Greater Noida Expressway have emerged as new office hubs and offer good opportunities,” he says.

These peripheral locations provide good Grade-A buildings at a lower cost. Social infrastructure in these areas is also developing rapidly. The Noida-Greater Noida Expressway (Sectors 124-144 of Noida) is an emerging destination for offices.

from Business Today

Read more: Business Today

Realtors with land banks to gain

The passage of the land acquisition Bill is set to make land more coveted. Now, those seeking to buy land and develop it would have to pay at least twice the amount. Analysts say acquisition would become cumbersome and expensive, owing to the passage of the Bill; at the least, the cost of land would rise 30-40 percent and this might lead to property prices rising two-20 percent.

While this might hit consumers, it would have a positive impact on real estate companies with large land banks. Between 2005 and 2007, several real estate companies built large land banks and recorded attractive valuations for these during share sales. Morgan Stanley believes the impact of the Bill is likely to be felt over the medium to long term; companies with large and diversified land banks are likely to benefit. If these companies are able to pass on the increase in property prices to consumers, their profitability would improve significantly. J C Sharma, vice-chairman and managing director of Sobha Developers, says, “Following the land acquisition Act, land availability would fall and it would cost more. As we move forward, companies that own land would have an edge over the others. But for that, the economy has to return to shape.”

Read more:  Business Standard 

Now, home buyers hit the streets against builders over non-delivery

On Saturday, some 350 members of a Gurgaon home owners’ association were seen braving the autumn sun at New Delhi’s Jantar Mantar.

The venue has become a protest hotspot since 2011, when Anna Hazare began his agitation against the system, giving activism a new coinage. But Saturday’s unrest was of a different nature. The protest was against a leading developer, DLF, for not delivering apartments on time and its alleged refusal to pay a compensation to frustrated buyers.

This is not a solitary case. Most big developers across the country are experiencing customer activism. And, the trend is only likely to pick up in a big way, say analysts tracking the sector, which has been in the middle of a slowdown due to a drop in demand. In fact, another protest by a group of home buyers – against Unitech, a prominent builder – is ready to hit the streets on Sunday itself.

Read more:  Business Standard 

Stay away from debt-laden realty companies

Realtors to be again hit by liquidity crunch, with RBI coming down on innovative home loan products.

Real estate developers are set to face a liquidity crunch yet again. Over the past week, the sector has been hit with two developments – the passage of the Land Acquisition, Rehabilitation and Resettlement Bill in Parliament and the Reserve Bank of India (RBI) cautioning banks on innovative home loan products. Both measures will impact the financials of real estate developers in the short and medium term. RBI’s notification will curtail the flow of cheap money to builders and put the cash-strapped ones in a corner. The new Land Acquisition Act will, of course, make land much more expensive.

Read more: Business Standard

Infotech

India has 55.48 cr mobile owners, 14.32 cr Internet users

There are 55.48 crore actual mobile users in the country and 14.32 crore internet users, according to a study by research firm Juxt.

“India has 55.48 crore mobile users as per our India Mobile Landscape (IML) 2013 study. More than 29.8 crore, about 54 percent, of these device owners are in rural areas as compared to 25.6 crore in cities and towns,” Juxt co-founder Mrutyunjay told PTI.

There are total 77.39 crore functional SIMs with validity but only 64.34 SIMs are being used by 55.48 crore mobile devices owners, the study report said.

Read more: Financial Express

NRI News

Rupee slide: Should NRIs buy houses in India now?

With the rupee touching all time lows against the dollar, it appears to be a great time for Non Resident Indians (NRIs) to remit funds to India for investment. And for most NRIs, the preferred asset class continues to be real estate. But with the India story looking a little bleak, is property a good investment right now?

The answer is yes, provided you are patient and cautious. “There has been price correction in India to a certain extent and developers are sitting on huge inventory. However, I estimate that the entire correction will take up to 2 years. So NRIs must be particular in their investments and pick and choose after due research,” says Pankaj Kapoor, Founder and Managing Director at Liases Foras Real Estate Rating & Research Pvt Ltd.

So if you are ready to take that challenging road, here are a few tips to help you along the way.

Read more: The Times of India

NRIs warned against taking rupees into India

UAE’s Central Bank has asked all banks and exchange houses to advise their customers not to carry rupees into India.

The Central Bank also asked banks and money changers to warn their customers of the consequences of failing to do so.

“The penalties stipulated in the new (Indian) law include confiscation of money, prosecution and imprisonment,” the bank said in a notice issued on Tuesday.

The bank’s directive came in the wake of the Indian Central Board of Excise and Customs (CBEC) implementing a new Law from May that criminalises bringing cash in Indian currency into India, Khaleej Times reported yesterday.

Read more: The Economic Times

Ireo’s The Grand Arch, located in Sector 58, is nearing completion. Click the image for more information about this amazing opportunity and more project progress photos.

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