Companies & Sectors
Brexit: Lodha and Indiabulls with UK assets face risks, says Fitch
Indian homebuilders with significant investments in the London property market will face near-term challenges from Britain's vote to leave the EU on June 23, says Fitch Ratings. Indiabulls Real Estate Ltd and Lodha Developers Pvt Ltd have significant exposure to the luxury residential and commercial property segments in London. Both companies made sizeable investments in London's Mayfair and suburbs in 2013 and 2014.
 
In a report, the ratings agency says, "Demand for luxury residential properties and commercial properties - the segments some Indian homebuilders have invested in - may remain weak at least over the coming six to 12 months as buyers postpone purchases and banks trim loans amid increased economic uncertainty." 
 
"Of the two, Indiabulls is less exposed to demand volatility in the next six to 12 months because it only expects to start developing its properties in 2017. Lodha could be more exposed to near-term property-market turbulence because it has already launched the smaller of its two investments," the ratings agency says.
 
According to Fitch, Lodha's rating already factors in the uncertainty around presales in its projects, both at home and overseas, as well as our view that near-term operating cash flows may not be sufficient to reduce its high leverage. Indiabulls' rating factors in its demonstrated ability to reduce leverage over the last 12 months, as well as the modest improvement in sales momentum in its key domestic property projects, it added.
 
Asking prices of London's luxury residential properties have fallen by 5%-20% over the last few weeks by some market estimates. This is in spite of the British pound trading at all-time lows against the US dollar - foreign investors make up a considerable part of the demand for London's luxury residential properties. 
 
"However over the longer term, these risks may be moderated by the tight supply of new residential developments, particularly in Central London, owing to challenges in securing regulatory approvals on new projects," Fitch says.
 
Commercial property demand has also weakened, and in some instances, prompted investors to exit commercial property-focused investment funds. This has led to some funds freezing withdrawals to enable a more orderly closure, while others have offered withdrawals at steep discounts to the net asset value to reflect the potential impact of having to sell assets quickly. Furthermore, many foreign and domestic banks have also cut credit exposure to London property investors by reducing loan-to-value ratios or freezing new loans altogether. 
 
Fitch says, the risk to Indian homebuilders will depend on the extent leverage was used to fund their London projects, and whether project construction and marketing sales coincide with the ongoing market volatility. Homebuilders may choose to defer marketing launches until investor sentiment improves, cut prices to spur higher sales, or sell equity stakes in the projects to reduce leverage, it added.
 

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Beijing refuses South China Sea arbitration award
Beijing on Tuesday said it neither accepts nor recognises the award of an arbitral tribunal in the South China Sea arbitration established at the request of the Philippines.
 
"The award is null and void and has no binding force," Xinhua news agency quoted Chinese Foreign Ministry as saying in a statement.
 
China's territorial sovereignty and maritime rights and interests in the South China Sea "shall under no circumstances be affected by those awards", the ministry said.
 
China opposes and will never accept any claim or action based on those awards, it added in the statement.
 
"China has territorial sovereignty and maritime rights and interests in the South China Sea," said a separate statement, adding that China has historic rights in the South China Sea.
 
China is always firmly opposed to the invasion and illegal occupation by certain states of some islands and reefs of China's Nansha Qundao (the Nansha Islands), and activities infringing upon China's rights and interests in relevant maritime areas under China's jurisdiction, according to the statement.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Water might be the new secret to weight loss
Water can be the potential secret weapon in the fight against the ever-burgeoning waistline, finds a study.
 
According to researchers, drinking water which contains no carbohydrates, fat or protein -- key factors for obesity -- may help avoid overeating and thus lead to a healthier weight.
 
"Staying hydrated is good for you no matter what, and our study suggests it may also be linked to maintaining a healthy weight," said lead author Tammy Chang, Assistant Professor at University of Michigan, in the US.
 
"Our findings suggest that hydration may deserve more attention when thinking about addressing obesity on a population level," Chang added.
 
The findings showed that people who are obese and have a higher body mass index (BMI) are more likely to be inadequately hydrated.
 
On the other, people with inadequately water content are also likely to be obese and have a higher BMI.
 
Staying hydrated by drinking water and eating more water-loaded fruits and vegetables can help with weight management, specially in obese individuals. 
 
However, "the link between hydration and weight is not clear. Our study further explains this relationship on a population level using an objective measure of hydration," Chang noted.
 
In addition, people with higher BMIs, who are expected to have higher water needs might also demonstrate behaviours that lead to inadequate hydration, the researchers said.
 
For the study, published in Annals of Family Medicine journal, the team looked at a nationally representative sample of 9,528 adults. Roughly a third of the adults, who spanned ages 18 to 64, were inadequately hydrated.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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