HSBC India scheme offers two options, one where the customer can make pre-payments subject to certain conditions and second wherein the customer chooses not to make pre-payments during the fixed rate period
HSBC India has launched a fixed rate product for home loans and loans against property. The scheme offers two options, one where the customer can make pre-payments subject to certain conditions and second wherein the customer chooses not to make pre-payments during the fixed rate period.
The new rate is available for one to five years period for home loans and five years for loan against property, with applicable rate beginning at 11.25% for a one-year tenor to 11.75% for a five-year home loan, the bank said in a statement.
There is 25 basis points discount for every tenor provided the borrower does not choose to pre-pay the loan, the statement added. Similarly, loan against property, which has a five-year tenor, the rate is 12.50% and 12.75% if pre-paid.
On expiry of the fixed rate period, the loan will switch to floating rate at a margin of 2% (for home loans) and 3.25% (for loans against property) over the prevailing base rate. "The second option has been specially introduced for customers who are aware that they are not likely to prepay the loan within the term of the fixed rate. In this case, they can avail of a 0.25 percentage points discount from the bank (on the fixed rate), thereby having the benefit of hedging their interest rate risks over the fixed rate tenure," the private lender said in a statement.
Factors like comforting inflation data and the government’s recent bold policy announcements are likely to act as a boost for the market. However, economic turmoil in the developed world is likely to act as a dampener, investment banking major Morgan Stanley said in its report
New Delhi: The Bombay Stock Exchange’s (BSE) Sensex index could surge by as much as 16% next year, but the rise will be marked by ‘volatility’, reports PTI quoting investment banking major Morgan Stanley.
“The probability-weighted outcome for the BSE Sensex is 18,741 for December 2012, 16% above the current level,” Morgan Stanley said.
The BSE benchmark Sensex has lost over 19% so far this year and closed at 16,542.62 points on 1st December. The Sensex is down by nearly 22% from an all-time high of 21,206.77 points scaled on 10 January 2008.
On the domestic front, factors like comforting inflation data and the government’s recent bold policy announcements are likely to act as a boost for the market. However, economic turmoil in the developed world is likely to act as a dampener.
“Inflation data is already moderating, setting the stage for monetary easing. The bad news on policy has stopped, although the volatility emanating from a weak developed world could keep pegging back Indian equities,” Morgan Stanley said.
As per the latest data, food inflation stood at a four-month low of 8% for the week ended 19th November.
Food inflation was in double digits for five consecutive weeks in October and early November.
“The positive side effect of any decline in inflation expectations will be a relative transfer of savings from gold to equities,” the report said.
Given the decline in seasonally-adjusted inflation, “The RBI (Reserve Bank of India) is set to change policy direction via the liquidity injection, CRR cuts and rate cuts path over the coming months,” it added.
However, excessive monetary easing in Europe or the US to address anaemic growth could trigger a rise in commodity prices, resulting in inflation across India all over again.
In addition, unrest in the Middle East has the potential to create pain via higher oil prices. A substantial depreciation in the rupee value poses the same risk to inflation, Morgan Stanley said.
On the policy front, recent action on FDI in pension funds and retail and power tariff revisions suggest that the bad news has stopped. However, multiple state elections in the coming months could imply continuing policy stalemates.
India is in a difficult position with respect to its fiscal deficit and the global crisis could cause the fiscal deficit to rise further, which in turn could pose a ‘problem’ for the market, the report said.
Moreover, India’s current account deficit and the way it is funded (largely by capital market flows) exposes India to a global financial crisis. This was the very reason for which the Indian equity market significantly underperformed in 2008-09 even though Indian corporate earnings outperformed the rest of the world.
The report, however, cautioned that a “significant global stimulus or a breakdown in capital markets would hurt India a la 2008.”
UP government’s decision to raise the cane procurement prices will inflate sugar prices further say experts
The prices of sugar are set to increase following Uttar Pradesh (UP) government’s decision to hike rates for sugarcanes to Rs240 per quintal from Rs205-Rs210 per quintal. Its effect can be seen in the markets sugar prices at retail level moving up by about Rs3-Rs4 per kg. UP is the second largest sugar producing state in India.
“The cane procurement prices have been increased by the UP government. This will directly affect the retail prices for sugar. From the current level, sugar prices are expected to rise further,” says Sageraj Bariya, managing partner, Equitorials research firm.
Currently the ex-mill price in UP is around Rs29 per kg. In Mumbai’s Vashi market, the prices are currently trading at Rs2-3 higher as compared to a month ago. Yesterday, in the Vashi’s wholesale market, M-grade sugar was quoted at Rs33 per Kg and S-grade was Rs32 per Kg.
There is a dispute going on between the farmers and government over the pricing policy for sugarcane. Last month, the Maharashtra government in agreement with farmers declared three different rates for sugarcane. Accordingly sugar factories across the state will buy sugarcane between Rs1,800 to Rs2,050, depending on the area. In Maharashtra co-operative sugar factories, mostly controlled by politicians, dominate the sugar industry.
The UP government increased the state advised price (SAP) by Rs35-40 per quintal of sugarcane to Rs235-240 per quintal for different varieties, against which the sugar industry in UP has filed a petition at the Lucknow bench of the Allahabad High Court, requesting it to quash the minimum buying price.
Indian Sugar Mills Association (ISMA), general secretary Shyamlal Gupta told Moneylife that, “Election is approaching and the cane pricing policy has been increased to Rs240 per quintal from the earlier Rs210 per quintal. It is a clear strategy of the government. This will affect the sugar mills from the state, and would eventually lead to arrears and defaults in bank loan payment. Our petition is pending with the Lucknow bench of Allahabad High Court.”
“The ex-mill prices should be at least increased to Rs3,400-Rs3,500 per quintal if the mills have to sustain. This naturally means that the retail price will go up by around Rs3-4 per Kg,” Mr Gupta added.
For the current year, India’s sugar production is estimated to 26 million tonne, around 2 million tonne higher compared to last year. The consumption is pegged at 22.5 million tonne. On 22nd November, the Empowered Group of Ministers (EGoM) approved export of one million tonnes of sugar under the Open General License (OGL) scheme.
In its second quarterly results Balarampur Chini, leading player in the sugar industry, noted that, “As we enter into 2011-12 sugar season, we anticipate the price pressure to ease on the domestic front due to export potential thereby facilitating improved performance by the sector as a whole. Exports gain significance in the current operating scenario when the SAP for cane has increased making it un-remunerative for sugar mills to convert cane to sugar at the current realizations.”
Mr Gupta says that, “The long term solution for this problem is to link the sugar cane prices to the prices of sugar realisation.”
While there appears to be mess in terms of fixed policy for sugarcane prices across the country, world over, sugarcane prices are linked with sugar prices. Major sugar producing countries like Brazil, Australia and Thailand share or pay 70% of the sugar prices to farmers as price for sugarcane.