Market analysts opine that the heavy selling by FIIs was triggered by the US credit rating downgrade, which led to panic among investors fearful of another recession in the world's largest economy and deepening of the financial crisis in European countries
New Delhi: Foreign funds pulled out nearly Rs8,000 crore, or $1.8 billion, from the Indian stock and debt market in August, the highest monthly withdrawal since October 2008, reports PTI quoting market regulator Securities and Exchange Board of India (SEBI).
Overseas investors purchased equity and debt securities worth a gross amount of Rs69,590 crore, but also sold securities worth Rs77,493 crore during the month-translating into a net outflow worth Rs7,902.50 crore, or $1.76 billion, during the period.
According to data available with SEBI, this was the highest monthly net sales by foreign institutional investors (FIIs) since October 2008, when they were net sellers of equity and debt of Rs13,489 crore.
FIIs turned net sellers in August this year after two consecutive months of net inflows. During the months of June and July, overseas players pumped in net amounts of Rs4,883.30 crore and Rs10,652.90 crore, respectively, into Indian markets.
Market analysts believe the heavy selling by FIIs was triggered by the downgrade of the US credit rating, which led to a panic among investors fearful of another recession in the world's largest economy and deepening of the financial crisis in European countries.
"FIIs are waiting for any trigger in the market... Market is still in the consolidation mode. They are also looking for the Reserve Bank of India's (RBI) review policy on 16th September," CNI Research CMD Kishor Ostwal said.
The heavy selling by FIIs was the main reason for the Bombay Stock Exchange benchmark Sensex losing 1,500 points in August, with investor wealth eroded by Rs5,55,650 crore-the biggest monthly loss since January 2011, when the market had lost a little over Rs7,00,000 crore.
FIIs were bullish on the debt market and made an investment of Rs2,931 crore during the period under review, while pulling out Rs10,831 crore from the equity market, SEBI noted.
So far this year, FIIs have pumped Rs19,531 crore into the stock and bond markets, compared to about Rs1,79,674 crore in the whole of 2010.
The number of FIIs registered with SEBI stood at 1,735 as of August this year.
While asking police to trace the source of the funds, a SC bench of justices Aftab Alam and RM Lodha refused to monitor the case further, saying the charge-sheet in what is known as the cash-for-vote scam has already been filed in the court
New Delhi: The Supreme Court on Friday asked the Delhi Police to trace the source of money used to allegedly bribe some parliamentarians ahead of a confidence vote in Lok Sabha (lower house of Parliament) in 2008, reports PTI.
While asking police to trace the source of the funds, a bench of justices Aftab Alam and RM Lodha, however, refused to monitor the case further, saying the charge-sheet in what is known as the cash-for-vote scam has already been filed in the court.
"The objective has been achieved. Everything should be left to concerned criminal court which is hearing the case. We were on a minor aspect. Who were involved and in what manner is to be decided by the court (trial court)," the bench said.
Former chief election commissioner JM Lyngdoh on whose plea the apex court had issued a slew of directions in the scam pleaded the matter should not be disposed of and the apex court keep the matter pending.
The court, however, was not convinced with the plea and said he can approach it at any stage when its intervention is required.
The Delhi Police also assured the bench that the probe will be completed within four weeks.
As soon as the court proceedings started, the bench remarked that Delhi Police has not found out the source of money and said the agency must focus on this aspect.
"You (Delhi Police) have not done what we said earlier.
Find out the source of money. You can do it, if you want to do it. You are capable of doing so," the bench said.
During the last hearing, the court had slammed the police for its "half-hearted and hopeless" probe and had asked the police to take the probe to its logical conclusion.
The Delhi Police, thereafter, had intensified its probe and filed the charge-sheet on 24th August in a Delhi court against six persons including Samajwadi Party's former general secretary Amar Singh, BJP leader LK Advani's former aide Sudheendra Kulkarni, two ex-BJP MPs Faggan Singh Kulaste and Mahabir Singh Bhagora along with Amar Singh's former aide Sanjeev Saxena and alleged BJP activist Suhail Hindustani.
While Mr Saxena and Mr Hindustani are in judicial custody, the trial court has issued summons to all the accused to be present before it on 6th September.
The police, in its charge-sheet, has accused Amar Singh and Sudheendra Kulkarni of 'conspiring' and 'masterminding' to bribe MPs to win their votes in the confidence motion after the Left withdrew outside support to government following differences on the Indo-US civil nuclear deal.
The case dates back to 22 July 2008 when some BJP MPs had waved wads of currency notes on the floor of Lok Sabha during the trust vote faced by the UPA-I government, claiming they were given the money to vote in favour of the Manmohan Singh government.
Everyday, thousands of home-seekers surf the Internet, looking for their dream home. How does the residential property market look through the lens of a property portal? Ganesh Vasudevan, vice president and business head of indiaproperty.com, gives an overview to Moneylife
Moneylife (ML): Let us start with how a property portal works. How do you collate data for your website?
Ganesh Vasudevan (GV): We get information from both the demand and the supply side. On the latter, we have the advertisers: individuals, agents and builders who post on the property they have to offer. On the demand side, we have the customers who surf the existing posts or even put up their own requirements. How effective a property portal is depends on how much handholding it does for the customer in identifying a property.
Indiaproperty.com provides video walkthroughs of new projects and details of new properties, along with interviews with the developer. We also research the neighbourhood and provide other relevant information. The idea is to help customers through the entire process.
ML: Since you monitor all these searches and data, can you outline some consumer trends?
GV: Well, I will say that trends are very region-specific. But we do see a shift occur from bigger to smaller apartments. Demand has shifted from 3BHK (three-bedrooms/hall & kitchen) units to 2BHK units. Even if customers do want a 3BHK flat; like those who have families with two kids; they are looking for flats with a smaller area of around 1,300 sq ft.
The reason is reduction in budget. Lending rates on home loans have gone up, and even for double-income households, new properties within city limits are becoming unaffordable, particularly in Mumbai and Delhi.
If I am booking a flat (costing) Rs50 lakh, I need to prepare a buffer of at least 10% of the amount, like Rs5 lakh for added charges and other expenses in the period between booking the flat and taking possession. With interest rates going up, my eligibility for a home loan at a fixed level of income reduces. So my aim will be to look for cheaper flats—either by reducing the apartment size or by settling for a location farther from the city.
ML: Location-wise, what kind of change have you observed?
GV: Affordability is the reason that people are moving to the outskirts. The so-called 'prime locations' are out of reach of most buyers. With improved transportation infrastructure in most metros, people can buy a home in the outskirts of a city and travel daily to their office.
ML: In Mumbai and NCR (National Capital Region), the property hotspots, we see that there is a slowdown. What do you think is the situation going to be like?
GV: Definitely there is a gap between demand and supply. Unsold inventory has been piling up—so in the medium term, we will see oversupply in some areas. Nationally, the NCR and Mumbai make up for more than 50% of new apartment supply in the country, and absorption of new properties in these markets has dropped sharply.
But the long-term picture is robust, simply because the demand for housing in urban areas far outstrips supply, and sooner or later, a person will buy a house. Many customers hence are mentally prepared for fluctuations in price and lending rates. In fact, we have not seen a drop in search volumes for properties in these cities and the number of fresh enquires for new properties is increasing. That shows that the demand has not waned.
ML: How have the builders responded to this present glut?
GV: Like I said, medium-sized units are now becoming more popular. Some builders who are overleveraged, resort to discount sales under pressure. But new technology has come up, which if adopted, will make a big difference. In south-east Asian countries, developers are using in situ casting and other such methods for fast development of multi-storeyed apartment blocks, bringing down construction costs at the unit level, which could lend to value-based pricing of projects.
ML: Is there a demand bracket which has seen very limited supply? For example, in Mumbai, we have a demand for studio apartments, which very few people offer.
GV: One such sector is affordable housing. The term doesn't mean simply low cost housing, but rather a no-frills unit both in the basic apartment and in amenities provided, so as to give a value for money alternative to buyers. These houses may be 2BHK flats with 1,000 sq ft area, priced between Rs15 lakh-Rs20 lakh. We are seeing this trend emerging in pockets near and around commercial and industrial centres. In the Delhi NCR region, you will see a lot of studio apartments which have come up along the Yamuna Expressway.
ML: Any tips for prospective home buyers who search on the Internet?
GV: While short-listing, look for developers or builders who have a credible track record. Search in portals that provide a wide width and scope in terms of options.
Also, try viewing the property location on Google Maps, so that you get a fair idea of the locality. Does it have schools, hospitals, parks and other amenities?And it is definitely advisable to take a second legal opinion on the property particularly—for used properties and land before signing the deal. In most cases, it is the bank which evaluates the property, but it is better to verify things yourself. Check that all required documents, clearances and records are in place. While negotiating the deal with the builder, ensure you understand the construction agreement terms clearly—particularly penalties for delayed payments and delayed delivery of the flat.