Wednesday, 11 November 2009
MSM is now Expert. Sharp rise in TDR prices leads to recovery in realty sector
Posted on 13:57 by Unknown
Monday, 9 November 2009
Barclays, Bank of America, JPMorgan Vie for India Stock Sales
Posted on 16:27 by Unknown
Bloomberg reports on government run PSU's being put on the block. MBA students should look to India for jobs as these companies should keep hiring for a while. This stock sale is going to suck the liquidity from the system, similar to what the Reliance Power IPO did in Jan 2008. Now unless you are an institutional investor, chances on getting onto the IPO bandwagon are almost zero, unless you open gazilion demat accounts under ficticious names as done in Gujarat and Rajasthan. Soon we will see real estate shrills pumping the Mumbai market that I-Bankers have returned to claim their piece of the most expensive land in the India.
By Subramaniam Sharma
Nov. 10 (Bloomberg) -- Bank of America Merrill Lynch, Barclays Plc and JPMorgan Chase & Co. are competing to sell shares for state-run companies in India as the government plans the biggest sell-off in at least five years.
Robert Morrice, Barclays Capital’s Asia-Pacific chairman, plans to double the London-based firm’s investment banking team in India as it vies to sell stock. JPMorgan hopes for a “slew of disinvestment” by state-run companies, said Kalpana Morparia, the New York-based bank’s chief executive officer in India.
Prime Minister Manmohan Singh’s government pledged last week to reduce its holdings in profitable state-owned companies to 90 percent, accelerating a fund-raising program that languished for five years. While government offers present a “big opportunity,” they typically pay lower fees than private- sector sales, according to Bank of America.
“The competition for this business is always extremely fierce,” Kevan Watts, country head for Bank of America, said in an interview. “It is prestigious business. It is not a very profitable business because the government, understandably, is not prepared to pay very high fees.”
Indian share sales will add to an IPO rebound in Asia as record-low interest rates and economic stimulus packages fuel a revival in demand for new equities. China Minsheng Banking Corp., Sands China Ltd., Malaysia’s Maxis Bhd. and India’s Emaar MGF Land Ltd. will lead more than $14 billion of sales in the region.
More
Thursday, 5 November 2009
Home prices up in 15 cities, shows Residex
Posted on 03:52 by Unknown
The new index of residential price movement – Residex, released by the National Housing
Bank (NHB), shows a mixed trend among 15 major cities.
As many as nine out of 15 cities, covered by Residex across the country, have witnessed hardening of residential property prices. Prices of homes have recorded a decline in cities such as Delhi, Bangalore and Bhopal, between December last year and June, but the same went up in cities such as Mumbai, Kolkata and Chennai, among others.
Prices of residential property in Mumbai have increased by 5.98 per cent between December and June, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices of residential property in Ahmedabad increased by 27 per cent in the same period and during the same time, Faridabad, the neighbouring city of Delhi, reported price hardening to the extent of a whopping 36
Article Link here
Bank (NHB), shows a mixed trend among 15 major cities.
As many as nine out of 15 cities, covered by Residex across the country, have witnessed hardening of residential property prices. Prices of homes have recorded a decline in cities such as Delhi, Bangalore and Bhopal, between December last year and June, but the same went up in cities such as Mumbai, Kolkata and Chennai, among others.
Prices of residential property in Mumbai have increased by 5.98 per cent between December and June, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices of residential property in Ahmedabad increased by 27 per cent in the same period and during the same time, Faridabad, the neighbouring city of Delhi, reported price hardening to the extent of a whopping 36
Article Link here
Friday, 30 October 2009
The big bank bailout?
Posted on 03:48 by Unknown
Why property prices did not fall enough in 2008
The real estate industry may have run into fresh trouble. Having emerged fresh from a crisis that threatened to take a few companies belly up, the worst was perceived to be over for the industry. However, data that emerged from a recent Reserve Bank of India (RBI) document shows that just when the industry was in the throes of the downturn in 2008, banks stepped in to lend generously when they needed capital to survive, saving developers the trouble of cutting prices to stay afloat.
here’s the hard data: as per the RBI document, loans to the real estate industry grew as much as 41% last year even as loans to homebuyers grew about 5% in the same period, confirming the trend that demand for property was indeed down.
In fact, in the monetary policy review that the central bank came out with earlier this week, it made loans to the realty industry stricter and ordered banks to arrange for coverage should any of their loans default and get classified as non-performing assets (NPAs).
Chetan Ahya of Morgan Stanley says that the real estate industry got easy lending from banks, due to which they were able to hold back sales and not cut property prices too much. “The RBI governor, post the monetary policy, was clear the RBI would like to see more adjustment in the property sector on the pricing front and that there should not be aggressive price increases,” he said.
Developers, though, were not pleased and on the contrary said the RBI move could result in project delays and make property costlier or impact their margins.
“Property prices are a function of the market, supply and demand. Therefore it at all the hit has to be taken and the prices cannot be increased it would obviously impact the margin,” said Pujit Aggarwal, Managing Director of Orbit Developers.
With the RBI turning on the heat on real estate companies, what will the outcome be on the industry and property prices? Time will tell.
The real estate industry may have run into fresh trouble. Having emerged fresh from a crisis that threatened to take a few companies belly up, the worst was perceived to be over for the industry. However, data that emerged from a recent Reserve Bank of India (RBI) document shows that just when the industry was in the throes of the downturn in 2008, banks stepped in to lend generously when they needed capital to survive, saving developers the trouble of cutting prices to stay afloat.
here’s the hard data: as per the RBI document, loans to the real estate industry grew as much as 41% last year even as loans to homebuyers grew about 5% in the same period, confirming the trend that demand for property was indeed down.
In fact, in the monetary policy review that the central bank came out with earlier this week, it made loans to the realty industry stricter and ordered banks to arrange for coverage should any of their loans default and get classified as non-performing assets (NPAs).
Chetan Ahya of Morgan Stanley says that the real estate industry got easy lending from banks, due to which they were able to hold back sales and not cut property prices too much. “The RBI governor, post the monetary policy, was clear the RBI would like to see more adjustment in the property sector on the pricing front and that there should not be aggressive price increases,” he said.
Developers, though, were not pleased and on the contrary said the RBI move could result in project delays and make property costlier or impact their margins.
“Property prices are a function of the market, supply and demand. Therefore it at all the hit has to be taken and the prices cannot be increased it would obviously impact the margin,” said Pujit Aggarwal, Managing Director of Orbit Developers.
With the RBI turning on the heat on real estate companies, what will the outcome be on the industry and property prices? Time will tell.
Monday, 26 October 2009
Realtors make a cautious comeback
Posted on 08:07 by Unknown
Flush with funds raised through QIPs and PE deals, builders are eager to cash in on the return of demand
The affordable housing concept too has pushed developers out of familiar territories. Unitech, which bought land nationally in the last five-six years, has launched projects in Lucknow, Mumbai, Kolkata, Chennai, Bhopal, Rewari and Mohali in the past six months, several under its affordable housing brand Uni Homes.
Even for its recently launched premium project in Worli, south Mumbai, Unitech slashed rates by at least 30%. In a pre-launch aimed at investors, it sold nearly 150 out of about 300 apartments in the project within a month, analysts said. Unitech is focusing on developing its existing land parcels, said R. Nagaraju, general manager, corporate planning and strategy. But the risk in expanding into other cities is in setting up a large team in each region to undertake the projects with enough freedom to operate, he said.
Bangalore-based Puravankara Projects Ltd plans to go pan-India through its affordable housing subsidiary Provident Housing Ltd. Encouraged by recent project launches in Chennai and Bangalore, it’s now aiming for Kochi, Hyderabad and Coimbatore.
The affordable housing concept too has pushed developers out of familiar territories. Unitech, which bought land nationally in the last five-six years, has launched projects in Lucknow, Mumbai, Kolkata, Chennai, Bhopal, Rewari and Mohali in the past six months, several under its affordable housing brand Uni Homes.
Even for its recently launched premium project in Worli, south Mumbai, Unitech slashed rates by at least 30%. In a pre-launch aimed at investors, it sold nearly 150 out of about 300 apartments in the project within a month, analysts said. Unitech is focusing on developing its existing land parcels, said R. Nagaraju, general manager, corporate planning and strategy. But the risk in expanding into other cities is in setting up a large team in each region to undertake the projects with enough freedom to operate, he said.
Bangalore-based Puravankara Projects Ltd plans to go pan-India through its affordable housing subsidiary Provident Housing Ltd. Encouraged by recent project launches in Chennai and Bangalore, it’s now aiming for Kochi, Hyderabad and Coimbatore.
Friday, 23 October 2009
Murthy to be venture capitalist and I wonder why now
Posted on 05:05 by Unknown
Economic Times reports that NRN Murthy has sold 180 crore of Infosys shares to start a VC firm in India which will invest in startups focussed on basic healthcare, education and nutrition.
The cynic in me says that this is a cooked up headline to justify the selling of Infosys shares which I believe is poised to plummet to depths not seen before.
There are two fallacies to this story propagated by NRN. Firstly the goal of VC is to generate returns in the excess of those which could be possible by the stock or bond markets, at the expense of taking a higher risk then normal. Any Silicon Valley VC will tell you that 99% of all startups fail but the 1% which succeed generate 1000% returns to compensate for all the failures. In the period 1999-2009 a VC study showed that more funds went bust then which made a profit for their investors.
Now given the risk profile for a VC, is NRN trying to become a silicon valley type VC or is he trying to become a "philanthropic venture capitalist". These three words are put together sound more ironic then "Sweet Tata Namak". The goals of each of these professions is different and do not intersect even on elliptical curve on a infinite plane.
Is NRN trying to downplay the share sales since he doesn't want investors to think that an insider is bailing out without attracting attention. As an investment decision NRN has made the right decision by slowly selling all his shares and hopefully diversifying his assets into index funds. As per the article he has now jus 0.4% shares of Infosys remaining so that speaks about the confidence he has in the company he has founded.
There was an article in Reuters the other day which spoke about how Accenture, HP and IBM consulting services have expanded in India to cut their overheads and now each employ more then three quarters of the workforce of Infosys or Wipro or TCS. Infosys trades at 20 times forward earnings versus 14 for IBM and similar disparities exist for Wipro and TCS. What more opportune time to sell the stock then when the Indian market has hit its cyclical bear market high!!
Good job NRN but sorry that you cannot pull the wool over our eyes. Full article here
BANGALORE: One of India's most successful entrepreneurs is turning into a venture capitalist (VC). Infosys Technologies' co-founder and chief mentor N R Narayana Murthy, on Thursday, sold shares worth Rs 180 crore to start a venture capital firm that would fund start-ups mainly in India. The idea is to encourage young entrepreneurs with brilliant ideas. The VC will invest in start-ups operating in the areas of basic healthcare, education and nutrition.
In a reversal of roles, in deciding to become a VC, Murthy is following in the footsteps of his daughter Akshata who was until recently a VC based out of Bay Area in Silicon Valley operating in the clean tech space. Until her marriage to Rishi Sunak in August, she was a senior associate at Siderian Ventures.
Murthy on Wednesday and Thursday sold a combined eight lakh shares of Infy to raise money to fund VC firm. The number of shares owned by him in the company now stands reduced to 23.8 lakh valued at Rs 526 crore at Thursday's closing price of Rs 2,211. The Murthy family's combined holding is around 5% with his wife Sudha owning the largest chunk. Murthy's individual holding in Infy which has been less than 1% for a while now stands reduced to 0.4%.
The cynic in me says that this is a cooked up headline to justify the selling of Infosys shares which I believe is poised to plummet to depths not seen before.
There are two fallacies to this story propagated by NRN. Firstly the goal of VC is to generate returns in the excess of those which could be possible by the stock or bond markets, at the expense of taking a higher risk then normal. Any Silicon Valley VC will tell you that 99% of all startups fail but the 1% which succeed generate 1000% returns to compensate for all the failures. In the period 1999-2009 a VC study showed that more funds went bust then which made a profit for their investors.
Now given the risk profile for a VC, is NRN trying to become a silicon valley type VC or is he trying to become a "philanthropic venture capitalist". These three words are put together sound more ironic then "Sweet Tata Namak". The goals of each of these professions is different and do not intersect even on elliptical curve on a infinite plane.
Is NRN trying to downplay the share sales since he doesn't want investors to think that an insider is bailing out without attracting attention. As an investment decision NRN has made the right decision by slowly selling all his shares and hopefully diversifying his assets into index funds. As per the article he has now jus 0.4% shares of Infosys remaining so that speaks about the confidence he has in the company he has founded.
There was an article in Reuters the other day which spoke about how Accenture, HP and IBM consulting services have expanded in India to cut their overheads and now each employ more then three quarters of the workforce of Infosys or Wipro or TCS. Infosys trades at 20 times forward earnings versus 14 for IBM and similar disparities exist for Wipro and TCS. What more opportune time to sell the stock then when the Indian market has hit its cyclical bear market high!!
Good job NRN but sorry that you cannot pull the wool over our eyes. Full article here
BANGALORE: One of India's most successful entrepreneurs is turning into a venture capitalist (VC). Infosys Technologies' co-founder and chief mentor N R Narayana Murthy, on Thursday, sold shares worth Rs 180 crore to start a venture capital firm that would fund start-ups mainly in India. The idea is to encourage young entrepreneurs with brilliant ideas. The VC will invest in start-ups operating in the areas of basic healthcare, education and nutrition.
In a reversal of roles, in deciding to become a VC, Murthy is following in the footsteps of his daughter Akshata who was until recently a VC based out of Bay Area in Silicon Valley operating in the clean tech space. Until her marriage to Rishi Sunak in August, she was a senior associate at Siderian Ventures.
Murthy on Wednesday and Thursday sold a combined eight lakh shares of Infy to raise money to fund VC firm. The number of shares owned by him in the company now stands reduced to 23.8 lakh valued at Rs 526 crore at Thursday's closing price of Rs 2,211. The Murthy family's combined holding is around 5% with his wife Sudha owning the largest chunk. Murthy's individual holding in Infy which has been less than 1% for a while now stands reduced to 0.4%.
Saturday, 17 October 2009
Happy Diwali and the bear
Posted on 18:36 by Unknown
I hope everyone is having a Shubh Deepawali with their family and friends and may Godness Laxmi smile on everyone with wealth and prosperity in the time to come.
However if you are Rakesh Jhunjunwala the way to earning your bounty is to go short on the Indian stock market. He is on the record now saying that Indian markets will crash. So if the big bull is now a big bad bear, no points for guess whether he is long or short on the. Like they say Bulls make money, bears make money, pigs get slaughtered. If the market tanks this week, it will be fantastic time to go short on the market.
In Samvat 2066 it appears the path to Laxmi Road is via Bear Street. Here is the rediff article
However if you are Rakesh Jhunjunwala the way to earning your bounty is to go short on the Indian stock market. He is on the record now saying that Indian markets will crash. So if the big bull is now a big bad bear, no points for guess whether he is long or short on the. Like they say Bulls make money, bears make money, pigs get slaughtered. If the market tanks this week, it will be fantastic time to go short on the market.
In Samvat 2066 it appears the path to Laxmi Road is via Bear Street. Here is the rediff article
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