Stocks
Nifty, Sensex are on an uptrend again – Monday closing report
A close below 7,700 would be the first sign of a trend change
 
We had mentioned in Friday’s closing report that Sensex, Nifty might give up some gains if it closed below 7,570. Nifty did not go below 7,700 and closed with small gains of upto 0.59%. The trends of the major indices in the course of the day’s trading are given in the table below:
 
 
Given that investors were expected to be cautious ahead of the monetary policy review on Tuesday, the key indices of the Indian equity markets traded flat initially then and closed strongly. Investors' sentiments were buoyed by a positive close to the US markets on Friday and stable Asian market today.  The BSE's market breadth favoured the bulls -- with 1,644 advances and 968 declines.
 
At the new fiscal's first bi-monthly monetary policy review due on Tuesday, RBI Governor Raghuram Rajan is widely expected to cut interest rates by at least a quarter of a percentage point on the back of the union budget's fiscal prudence measures, reduction in small savings interest rates and low inflation. At its sixth and the fiscal's final bi-monthly monetary policy review in February, Reserve Bank of India (RBI) kept its key lending rate unchanged at 6.75%.
 
"The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on inflation," Rajan said in his policy statement at the time. The government has cut the small savings interest rate by up to 1.3%, facilitating an RBI rate cut. India's annual retail inflation eased to 5.18% in February from 5.69% in the month before even as the 12-month wholesale inflation was in the negative for the 16th straight month, official data showed last month. Rajan, last month, kept the cards close to his chest on possible easing of monetary policy with rate cuts, but said the government's decision to stick to its fiscal targets was comforting. He also said economic recovery in the country was not smooth, particularly after data on index of industrial production (IIP), released by the Central Statistics Office last month, showed India's factory output had logged a decline in January for the third straight month.
 
Global private equity fund Blackstone on Monday announced buying a majority stake (60.5%) in Mphasis, a leading IT services player, from Hewlett Packard Enterprises (HPE) in a deal valued between Rs5,466 crore and Rs7,287 crore. "As per the Takeover Code in India, the transaction will trigger a mandatory open offer to purchase the HPE's additional 26% shares," Blackstone said in a statement on the deal. In a regulatory filing to the Indian stock exchanges NSE and BSE, Blackstone said it would buy HPE's equity holding at Rs430 per share. The shares of Mphasis, however, declined Rs13.90 or 2.95% to Rs453.60 from an opening price of Rs472.30 and previous closing rate of Rs467.20 on the BSE in post-noon trading. Though Blackstone has agreed to buy 84% of HPE's stake at Rs430 per share, it will purchase an additional 16% through an open offer from the public, as permitted by the securities laws. Mphasis shares closed at Rs454.45, down 2.77% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 

User

Real Estate Bill: Problem half-solved?
While the Bill protects consumer interest, faster approvals are also crucial for developers to prevent delays. In this regard, the Bill falls short and thus the problem is only half-solved, says Liases Foras
 
The Real Estate Regulatory Bill aims at reducing delays and ensuring faster completion through transparency, accountability and efficiency. "While the bill protects consumer interest, faster approvals are also crucial for developers to prevent delays. Against this backdrop, regulatory authorities aim to promote single window system of clearances for real estate projects, wherein the projects and promoters both can be graded along with digitisation of land records. However, the bill has a long way to go as far as faster sanctioning process is concerned. Thus, the problem is only half-solved," says Liases Foras Real Estate Rating & Research Pvt Ltd. 
 
Project delays are the biggest menace for the Indian real estate and one of the key reasons for sky-high prices, Liases Foras says, adding with the new Bill, sales will happen on carpet area, which is a practice followed in the developed countries such as Singapore and UK. Secondly, the escrow account will help in curbing diversion and misuse of funds, thus ruling out speculative practices, it added. 
 
According to Liases Foras, incomplete projects have a huge negative bearing on India's gross domestic product (GDP). It says, "Delay in completion is a menace that has plagued the sector since long. For our analysis, we have considered all the total supply across all the 25 cities under our coverage universe. About 34% of this supply is more than 12-months delayed. This estimated delay of residential projects amounts to 1.32% of GDP (2014-15) at current prices."
 
 
These cities include, Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bangalore, Chennai, Pune, Ahmedabad, Hyderabad, Surat, Kolkata, Chandigarh, Vadodara, Jaipur, Indore, Lucknow, Bhopal, Nagpur, Coimbatore, Nashik, Goa, Cochin, Mangalore, Thiruvananthapuram, Palghar, Boisar, Kanpur, Bhubaneswar, Rajkot and Patna.
 
Based on Liases Foras' data, Urban Development Minister M Venkaiah Naidu had said, "As per available information for 27 major cities including 15 capitals, 2,349 to 4,488 new housing projects were launched every year between 2011 and 2015. Thus in these 27 cities during these last five years, a total of 17,526 projects were launched with a total investment value of Rs13,69,820 crore".
 
The Rajya Sabha approval to the much awaited Real Estate Regulatory Bill proves there is indeed light at the end of tunnel, Liases Foras said, adding, most of the lacunae in the functioning of the sector can be attributed to lack of clearly defined regulatory norms. However, it can now be said that things will gradually fall into place.
 
Delays in project completion, misuse of funds by developers and ambiguity over saleable area parameter are few things that have depleted buyer's trust over the years. This Bill based on three major foundation stones, Transparency, Accountability and Efficiency has the power to tie all loose ends in the real estate sector. A genuine intention has been leveraged and the impact of this Act will be large.  
 
 
Besides delays, the realty sector is flush with huge inventory. At present, the inventory across major cities in India stands at one million units, clocking in a growth of approximately 22% on an annual basis. As per National Housing Bank (NHB), the housing shortage is estimated around 18 million units in urban India. "Currently, 2.85 lakh units are sold on a yearly basis and fulfil this shortage, sales have to grow more than five times. This is required for the inventory to be sustainable. In order to boost sales there has to be rationalisation of prices. Unless there is an uptick in sales, market would never be able to absorb additional stock which would lead to a decline in new supply," Liases Foras said.
 
A nation's economy has its foundation in consumer confidence. The Bill will be instrumental in alleviating dwindling confidence and weak sentiment that prevails across the sector. With increased transparency, Liases Foras feels real estate sector will start to look up and find itself on a global footing.
 
The Government of India has also mooted an ambitious policy called "Housing for All" for the urban poor, and without the proper regulatory mechanism in place, this policy will be unable to yield the desired results. 
 
"The amendments are in the right direction, but it is imperative that they be implemented within the time frame when the momentum is intact. With the Cabinet nod to the amendments, the Bill is very close to becoming an Act, after which it's the State's responsibility to bring it to effect by appropriate measures," Liases Foras concluded.
 

User

COMMENTS

manoharlalsharma

11 months ago

Real Estate Bill: Problem half-solved? yes u r rightly said to make full-proof it is the departments obligation of concerned approvals be in order to complete its' job within in a time bound period.

SRINIVAS SHENOY

11 months ago

The Real Estate Regulatory Bill, which was long overdue has finally seen the light of the day. In Maharashtra the Real Estate regulator.should be put in place expeditiously, as the State was keen on having it's own Real Estate Regulatory laws for the real estate sector. Thus if the state government machinery gears up,the Real Estate Regulatory Act can be immediately put in place, without bureaucracy hurdles in its way resulting in providing immediate relief to the harassed purchasers.

manoharlalsharma

11 months ago

Real Estate Bill: Problem half-solved? ; it is nothing but expanded version of MOFA with some editions and corrected.

SRINIVAS SHENOY

11 months ago

Hope the housing regulator, for the realty sector in Maharashtra,is appointed, without any further delay. Hoping the above act will come into force without any further delay.

Panama Papers: Unravelling hidden wealth of rich and powerful
The disclosures over the weekend by the International Consortium of Investigative Journalists (ICIJ) reveal how the rich and powerful use tax havens to hide their wealth
 
Over 2,600 GB of data comprising more than 11 million documents about some 214,000 hidden offshore companies owned by prominent people, including some from India, together make up for one of the biggest revelations called "Panama Papers".
 
The disclosures over the weekend by the International Consortium of Investigative Journalists (ICIJ) reveal how the rich and powerful use tax havens to hide their wealth. 
 
The documents were leaked from one of the world's lesser known law firm Mossack Fonseca based in Panama. 
 
ICIJ’s probe is unprecedented and is said to be larger than the US diplomatic cables released by Wikileaks in 2010 and the secret intelligence documents given to media houses by Edward Snowden in 2013.
 
The ICIJ, together with the German newspaper Suddeutsche Zeitung and more than 100 other media partners, including the Indian Express from India, spent a year sifting through 11.5 million leaked files to expose the offshore holdings of world political leaders, links to global scandals, and details of the hidden financial dealings of "fraudsters, drug traffickers, billionaires, celebrities, sports stars and more", the consortium said on its website.
 
The document trove includes nearly 40 years of data from the Panama law firm that has offices in more than 35 locations around the globe, and is one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets, according to the consortium.
 
ICIJ’s analysis of the leaked records revealed information on more than 214,000 offshore companies connected to people in more than 200 countries and territories. The top leaders under the scanner include Russian President Vladimir Putin and Pakistan Prime Minister Nawaz Sharif among others.
 
The data includes e-mails, financial spreadsheets, passports and corporate records revealing the secret owners of bank accounts and companies in 21 offshore jurisdictions, including Nevada, Hong Kong and the British Virgin Islands.
 
ICIJ’s data and research unit indexed, organised and analysed the 2.6 terabytes of data that make up the leak, using collaborative platforms to communicate and share documents with journalists working in 25 languages in nearly 80 countries. All this was kept under wraps for about eight months since the investigation started.
 
The documents show how Mossack Fonseca helped clients launder money, dodge sanctions and evade tax. The Panama company has, however, denied any wrongdoing. It says it has operated beyond reproach for 40 years and has never been charged criminally.
 
Gerard Ryle, director of the ICIJ, said the documents covered the day-to-day business at Mossack Fonseca over the past 40 years.
 
"I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents," he said.
 
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.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)