India's financial system is strong: RBI

India's financial system is strong: RBI (anitpromoters.com)

A day after global credit rating agency S&P cut India's outlook to 'negative', RBI on Thursday said the country's financial system is strong and sometimes these ratings are discounted by markets.

It also said that the Reserve Bank will intervene in the forex market only if there is high volatility in the currency market, not just because of the ratings.

RBI Deputy Governor KC Chakrabarty said the central bank will come out in June with its next financial stability report, which showcases the country s financial strength, and it will reflect the position of the economy.

India's financial system is strong: RBI

"Indian financial system is strong. That is what our internal assessment. That our financial stability report always gives. Again, RBI s financial stability report will come in June. Then you can see what the position is," Chakrabarty told reporters on the sidelines of an event.

"Sometimes rating discounts. That means what is coming in the rating is discounted by market," he added, while replying to a query on the impact of S&P report.

Standard & Poor's yesterday downgraded India's credit outlook to 'negative' and warned of a downgrade if there is no improvement in the fiscal situation and political climate. Finance Minister Pranab Mukhejree had said the government was not feeling panicky but it was concerned and will take note of the "timely warning".

Chakrabarty said RBI is examining the situation and cannot comment further on the subject.

"Now without examination and diagnosis I cannot comment. Let me complete the testing and diagnosis. After that let me understand what is happening," he said.

Replying to query on RBI s intervention in forex markets, he said, "Our currency intervention depends on volatility in the market. Not based on the ratings. Because of the rating if there is a volatility, if there is need to intervene, then RBI will intervene."

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Real Estate News(Property Awards 2011 for Commercial Excellence)

Property Awards 2011 for Commercial Excellence - ANIT PROMOTERS

The second edition of the prestigious Property Awards 2011, recognising excellence in Commercial Real Estate was a grand success with participation from leading developers and other real estate professionals. The evening at Westin Hotel, Mumbai on December 13, 2011 saw developers and architects of state- of -the -art projects emerge winners. 

 UBM Asia’s  Executive Vice President, Michael Duck gave the welcome address which was followed by a thought provoking panel discussion on the topic, “Commercial Real Estate: The Harbinger of Economic Growth.”  The discussion emphasized the role and importance of commercial real estate in boosting the economy and how both impacted each other.  The panel was of the opinion that the current slowdown in the economy could be improved only if the government went ahead and introduced the second line of reforms and completed infrastructure projects. While developers had a long term vision and were ready to take the plunge in making investments in various locations these could be meaningful only with the necessary interventions and initiatives by the government.

The evening also saw the release of a coffee table book on the evolving business districts of Mumbai titled “Evolutionary Workplaces: New Vistas, New Horizons.”  The book provides a preview of Mumbai’s business districts, their USP and future potential which will serve as a guide for both the domestic and foreign investor looking to invest in India and in understanding Office Spaces in these business districts.

The highlight of the evening were the Nomination category awards which saw Oberoi Commerz at Goregaon, Mumbai win the Luxury Project of the year award; Platina building at BKC from the Wadhwa Group, Mumbai  winning the Commercial Project of the year award; Citibank won the Occupier of the Year award for its eco friendly initiatives at its Nirlon Knowledge Park facility,

Eco-project of the year award was won by Sobha Developers for the Bayer Eco Commercial Building  while the Office Architect of the year award was bagged by Morphogensis from NCR region.

 

The awards constituted three sections, the nomination category, the survey category and the management awards. The winners in the nomination category were through nominations invited for commercial projects from leading developers, architects and occupiers of office spaces. These were then evaluated on the criteria of innovation, impact on the end user and design aesthetics. The winners were evaluated and selected by a screening panel and collegium of eminent real estate personalities. 

The survey category winners were chosen through a survey of  industry stakeholders. Here the three top office Space developer awards went to Ascendas India, Peninsula Land and TCG Real Estate while the three top mall developer awards went to Phoenix Mills, Ambuja Realty and K Raheja Corp.  The Trusted Commercial Property Advisor of the year award was received by CB Richard Ellis, South Asia  while the trusted Retail Property Advisor of the year award went to Jones Lang LaSalle.

The two management choice awards for Property Personality of the Year for notable contributions to commercial spaces in India went to Mr Raj Menda, MD, RMZ Group and the Young Property Entrepreneur of the year award to Mr Neel Raheja, Group President, K Raheja Corp for augmenting commercial spaces in India through his contributions and achievements.

The awards were under the aegis of UBM India,  part of the $2.5 billion UBM plc, listed on the London Stock Exchange, which worldwide organizes 300 events, publishes 200 magazines and periodicals and hosts 200 websites.

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What is your outlook on L&T Finance , Adani Power and DCB from two-three year prospective?

 L&T Finance Holdings' (LTFH) subsidiary - L&T Finance (LTF), has executed definitive agreements to acquire FIL Fund Management (Fidelity AMC) and FIL Trustee Company, the companies carrying on the mutual fund business of Fidelity in India, subject to regulatory approvals. Lazard was the financial advisor to L&T Finance in the transaction. Technically, the stock is looking good and the major support is at the level of Rs 37.50; one can hold the stock with target of Rs 56-60 level for short to medium term investment horizon.

Adani Power has reported a net loss of Rs 358.42 crore for the quarter ended December 31, 2011 as compared to net profit of Rs 109.11 crore for the same quarter in the previous year. The stock has made bottom of Rs.60 and it is consolidating between Rs 60-80 level; if it gives a closing of below Rs 60 level, one can exit the stock.

Development Credit Bank has reported 52% jump in net profit at Rs 17.3 crore in the fourth quarter ended March 31, 2012 as against Rs 11.4 crore in the year-ago period on the back of lower provisioning and overall reduction in costs. Meanwhile, the bank's gross NPA ratio came down to 4.40% at Rs 7 crore during the quarter under review from 5.85% or Rs 11 crore. Its net NPA ratio improved to 0.57% from 0.96%. For the full year, the bank saw its net profit more than doubling to Rs 55.1 crore from Rs 21.4 crore, driven by lower provisioning, which massively came down to Rs 29 crore from Rs 65 crore. For the full fiscal, NIM was 3.25% as against 3.13% last fiscal. Fundamentally and technically, the stock is looking strong. One can buy at current level for long term view for the target of Rs.65.

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Guideline rates lag 10-45% behind booming realty market (anitpromoters.com)

If you need any proof of how buoyant the REAL ESTATE scene in Chennai is, here it is. In the five months since the guideline values (government-notified rates for registration of properties) were revised across Tamil Nadu, the market rates have already overtaken them by 10-45%. The guideline value is used by the state government to assess the actual value of the property for levying stamp duty. Guidelines values were revised late last year after a gap of five years so that they would be indicative of prevailing market rates.

Growing demand for housing in the city has resulted in a steady climb in apartment prices both in the city and the suburbs over the last six months. "Hence, in most areas, the guideline value is below the market price and the difference ranges from 10% to 45%," real estate consultant S Ramaswamy of RECS Group said.

For instance, the guideline value of land on the Arch Bishop Mathias Road in Boat Club is 18,000 per sq ft whereas the prevailing market value for the street is around 33,000 per sq ft. Similarly, guideline value for RK Salai is 19,000 per sq ft whereas the market rates are close to 25,000 per sq ft. Guideline values are on the lower side even in central business districts. Guideline value on Khader Nawaz Khan Road, which is a premium shopping hub, is only 9,500 per sq ft. Guideline value on Haddows Road is also similarly low.

Experts say prices in most parts of the city have increased by close to 20% in the last six months, going by the residential price index (Residex) brought out by the National Housing Bank.

According to recent figures, Chennai is one of the fastest growing real estate markets among all metros, but this boom is not reflected in the new guideline values finalized five months ago. Guideline values were revised after a span of five years. In the meantime, prices within city had increased two to four-fold while the jump was about five to six times in the suburbs.

However, property consultants also point out that many buyers and sellers are keen on registering properties at market price. "Whenever a property is registered for a price higher than the guideline value, that becomes the new benchmark for the locality. Hence, over a period of time, the gap between guideline and market rates will reduce," said P Ramesh, a mediator.

While guideline values in the city are higher than market values, in the suburbs it is the reverse, and that is a matter of concern, say realtors. This disparity is partly owing to the slow growth of real estate prices in suburban areas. "Even if properties are available at lower rates, we have to pay a higher stamp duty and registration fees there as they are calculated based on guideline values, which are higher than market prices," Chitty Babu said. There is also a section of developers who feel that in some areas, the guideline value revision has been far too steep. "With such upward revisions, middle income people will find it difficult to buy properties in the city. Already, many of them are moving to suburban locations," PV Sanmugam, managing director, Kgeyes Residency said. But how far this argument will cut ice is a matter of debate.

Even when the guideline values were low, builders kept apartment prices high, said P Manikandan, who ended his five-year hunt for an apartment a month ago.

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Good Savings tools in India is Realestate

NEWS- (ANIT PROMOTERS)

                The West is rewriting the phrase "as safe ashouses", considering the drop in real estate values. But in India, real estate continues to make sense as a retirement savings option.

Three factors that support real estate as a retirement savings option are: India's housing shortage, favourable demographics and a tax regime that favours borrowing to buy a house. While this is clearly not an option for a large section of the population because of steep realty prices, it is viable for those with enough savings and good cash flows. A sharp correction in property prices in late '90s and immediately after the Lehman Brothers crisis in 2008 may have raised doubts in the minds of some, but financial planners continue to support real estate as a retirement tool. With an entry barrier for a two-bedroom apartment within the Mumbai city limits nudging Rs 1 crore, this is clearly not an option for all. But given that there is a sizeable population with high disposable incomes and tax liabilities, real estate makes an interesting proposition. "For those who don't yet own a home, buying a house has to be a top priority. But even for homeowners in a high tax bracket, there are a number of factors such as tax savings, capital appreciation and cash flow that would tempt them to definitely look at a second home," says Pankaj Mathpal, a certified financial planner.

This may seem as surprising advice, considering that in the West houses are depreciating as soon as they are built. But there is a marked difference between the West and India. In the US, the average members in a household are 2.6. In India, although numbers are not available, there is a shortage of 21 million housing units. According to a report by Credit Suisse, Indians will continue to migrate to cities and 50% of the country will be urbanized by 2044.

According to Brigitte Miska, head of international pensions with German insurer Allianz, who has done a study on the preparedness of various countries to look after retired citizens, real estate has its risks. "The elderly live in small cities and villages while the young move to larger cities. As a result demand for houses in smaller cities shrinks. We are already seeing that in the West," she said. Miska points out that demand for houses come largely from young couples.

"If you have a second house in which you do not live in the notional rent that you could earn from is taxable. What most people do is to take a housing loan and rent out the place," says Arnav Pandya, a certified financial planner. He points out that the advantage of taking a home loan on a second home is that there is no limit on the interest expenditure that can be set off against income from the flat. "If the borrower is earning a rent income and simultaneously paying interest on a home loan, the rental income can be set off against the interest expenditure,"

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The job of real estate agents is to lie. "Buyer's agents" and "seller's agents" all work for the same person: themselves, trying to sell property as quickly as possible for as much money. (anitpromoters.com)

Land Buying Tips

Although I've bought land, I'm not a specialist. This information is mostly second-hand.

1. To do it right, get the book Finding and Buying Your Place in the Country by the agent. In addition to the money to buy the land, you need the money and time to have access to a car and spend months driving around looking at properties and looking up information about titles, water, easements, zoning laws, building codes, mineral rights, contracts, and so on and so on. Doing it right is too hard for most people to do alone.

2. The most common group-land-buying disaster goes like this: after a few years someone wants out, and wants to be paid their share of the land's current value -- but it's gone way up, and the other people don't have the money. So you have to sell your Eden to developers just so one asshole can make a profit. If you do not have a contract to prevent this, it's almost certain to happen. You must all agree in writing that if someone wants out, they get, at most, what they paid in.

3. Buy within your means. I strongly recommend you save up money and pay cash for the land. Loans are difficult to get, stressful, expensive, and multiply the things that can go wrong. Even if the seller will take gradual payment, it's more expensive and consumes psychic energy. Save up a bunch of money, set a maximum, and then push down from that maximum.

5. Think through what you want. For example, I wanted the following things: a) It has to be at the top of the watershed, or so close to the top that there's no risk of anyone putting shit or toxins in the water or draining it dry before it gets to me. b) There must be surface water on the land, a spring or stream, that runs at least part of the year. c) At least 5 acres, ideally 10, 20 would be a miracle at my price, which is... d) $8000-$15,000. e) Not too many north-facing slopes. f) Accessible by road, with an easement, which is a legal right to cross other people's property. g) The more remote, the better.

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