Wednesday, April 1, 2009
What Asia should expect from G20
What Asia should expect from G20
The Economic Times, April 1, 2009, Page 13
Jaspal Bindra
ASIA has come of age. In a few days, the region’s rising powers — China, India, Korea and Indonesia — will sit at the global high table to decide on ways to reshape the world’s financial and economic order.
As leaders from the Group of 20 nations converge in London this week, expectations are that the outcome will include concrete steps to revive growth, a boost in funding for the International Monetary Fund (IMF), and an understanding on the new financial architecture to restore trust in the financial system.
Asian policy makers will seek two other critical assurances — one, that developed countries will keep their markets open; and two that global capital flows will remain unchecked. Consensus is difficult. But the stakes have never been higher.
Amid frenetic attempts to tackle the biggest economic crisis since the Great Depression, one can forget that progressive dismantling of international trade and investment barriers had fuelled the biggest economic boom the world has seen. More than 200 million jobs were created worldwide between 2000 and 2007, according to the Institute of International Finance, and millions in the developing world were lifted out of poverty. Yet, as the crisis continues, leading economies could encourage manufacturers to keep production onshore, and banks and insurance companies to keep money within their borders.
Any such protectionism comes at a dark time. While Asia remains fundamentally robust, the turmoil has caused consumers and lenders in developed countries to tighten their purse strings. In addition, the International Institute of Finance estimates that net private capital flows to emerging markets could drop to $165 billion this year from over $925 billion in 2007. Ensuring trade and capital keep flowing must top the agenda of the G20, whose member countries account for two-thirds of the world’s population and over 80% of its output.
The London meeting, the second G20 summit meeting, could see the emerging Asian powerhouses assert more leverage due to the relative strength of their position. Though weakened, China, India and Indonesia are still expected to grow 6.8%, 5% and 4%, respectively.
The emerging powers have already notched up some gains. The G20 finance ministers, meeting in London in March, agreed to expand the Financial Stability Forum — a body which will set new standards for global financial institutions — to include developing country members. These countries will also join global forums that will set new international accounting and risk-regulatory frameworks.
Greater participation of the rising powers in such key decision-making bodies should help resolve potential conflicts and go a long way in helping to rebalance the world economic order.
Ironically, it is the financial upheaval which has brought the systemic importance of the emerging markets to the forefront. It is now clear that the imbalances between the high-saving nations in the East and overspending economies of the West led to the asset bubbles in the US and Europe.
Big savers, particularly in Asia, must spend more to boost domestic economies. China has made a decisive move on this front with its $600-billion stimulus plan. Others in the region have also taken unprecedented steps.
Emerging economies must step up trade among themselves. That is already happening. For some countries in the region, China has replaced the US and Europe as the biggest export market, a trend that will accelerate as western consumers curb spending.
Asian members of G20 are also looking to international lenders such as the IMF and the World Bank to revive investments into the region’s developing economies.
The author is chief executive, Asia, for Standard Chartered Bank
The Economic Times, April 1, 2009, Page 13
Jaspal Bindra
ASIA has come of age. In a few days, the region’s rising powers — China, India, Korea and Indonesia — will sit at the global high table to decide on ways to reshape the world’s financial and economic order.
As leaders from the Group of 20 nations converge in London this week, expectations are that the outcome will include concrete steps to revive growth, a boost in funding for the International Monetary Fund (IMF), and an understanding on the new financial architecture to restore trust in the financial system.
Asian policy makers will seek two other critical assurances — one, that developed countries will keep their markets open; and two that global capital flows will remain unchecked. Consensus is difficult. But the stakes have never been higher.
Amid frenetic attempts to tackle the biggest economic crisis since the Great Depression, one can forget that progressive dismantling of international trade and investment barriers had fuelled the biggest economic boom the world has seen. More than 200 million jobs were created worldwide between 2000 and 2007, according to the Institute of International Finance, and millions in the developing world were lifted out of poverty. Yet, as the crisis continues, leading economies could encourage manufacturers to keep production onshore, and banks and insurance companies to keep money within their borders.
Any such protectionism comes at a dark time. While Asia remains fundamentally robust, the turmoil has caused consumers and lenders in developed countries to tighten their purse strings. In addition, the International Institute of Finance estimates that net private capital flows to emerging markets could drop to $165 billion this year from over $925 billion in 2007. Ensuring trade and capital keep flowing must top the agenda of the G20, whose member countries account for two-thirds of the world’s population and over 80% of its output.
The London meeting, the second G20 summit meeting, could see the emerging Asian powerhouses assert more leverage due to the relative strength of their position. Though weakened, China, India and Indonesia are still expected to grow 6.8%, 5% and 4%, respectively.
The emerging powers have already notched up some gains. The G20 finance ministers, meeting in London in March, agreed to expand the Financial Stability Forum — a body which will set new standards for global financial institutions — to include developing country members. These countries will also join global forums that will set new international accounting and risk-regulatory frameworks.
Greater participation of the rising powers in such key decision-making bodies should help resolve potential conflicts and go a long way in helping to rebalance the world economic order.
Ironically, it is the financial upheaval which has brought the systemic importance of the emerging markets to the forefront. It is now clear that the imbalances between the high-saving nations in the East and overspending economies of the West led to the asset bubbles in the US and Europe.
Big savers, particularly in Asia, must spend more to boost domestic economies. China has made a decisive move on this front with its $600-billion stimulus plan. Others in the region have also taken unprecedented steps.
Emerging economies must step up trade among themselves. That is already happening. For some countries in the region, China has replaced the US and Europe as the biggest export market, a trend that will accelerate as western consumers curb spending.
Asian members of G20 are also looking to international lenders such as the IMF and the World Bank to revive investments into the region’s developing economies.
The author is chief executive, Asia, for Standard Chartered Bank
The A to Z of G-20
The A to Z of G-20
The Times of India, April 1, 2009, Page 13
And what will be Brown’s return gift?
He will present goodie bags that will showcase “British creativity”. They will include a tie designed by one of three British tailors (Ozwald Boateng, Timothy Everest and Richard James), a tea towel from Ulster-based linen producer Thomas Ferguson Irish Linen, Kelly Hoppen candles, and Rococo chocolates. What about those world leaders who don’t wear ties — Will they get an alternative gift? It’s not known
Very little on the table
Stung by criticism about stuffing palates while talking poverty, Brown has taken the knife to the menu. The banquet has only 6 courses. According to some sources, two of them are asparagus as starters, Welsh lamb as the main course and flat bread.
What all will Obame bring?
Air Force One has a gym, electronic defence units and shielding to protect it from nuclear blasts. At Stansted, Obama will transfer to his helicopter Marine One, which has flares and anti-missile countermeasures to deal with heat-seeking and radar-guided missiles. Obama will travel around London aboard Cadillac One, which does eight miles to the gallon and is described as “a panic room on wheels”. It is equipped with shotguns, tear gas, a night-vision camera and bags of Obama’s blood (group AB). Among the 500 or so US personnel who will travel with the president are nurses and surgeons
How many Gs are there?
There’s G8: the seven richest nations with an extra place for Russia. The number after the G doesn’t have to be accurate. So G77, representing developing nations at the UN, has 130 members. But lower the number after the G, the more important it is. Some might argue that the most effective group within this G20 will be G2: US and China. We would like to believe that it will be G3: US, China and India.
Will there be protests?
There are protests planned for the City, east London, the West End and at many embassies around the capital most of Wednesday and Thursday. First off will be four simultaneous marches, led by effigies of the four horsemen of the Apocalypse, which will leave Moorgate, Liverpool Street, Cannon Street and London Bridge stations at 11am, converging on the Bank of England. The issues range from war, climate chaos, financial crimes and land enclosures. Meanwhile, 1,500 people plan to bring tents and erect a climate camp in the City outside the European Climate Exchange at Bishopsgate at lunchtime. On top of that, Stop The War Coalition will march from the US embassy in Grosvenor Square to Trafalgar Square in the afternoon.
Who will be the star of G20?
Dumb question. Barack Obama, of course. He is, as he said, ready to lead. The other traditional headline-grabbers is France’s Nicolas Sarkozy, as heavy a hitter internationally as he’s easily dismissed domestically. But the real star apart from Obama is likely to be China’s Wen Jiabao and India’s Manmohan Singh — leaders of two countries that are still growing while the rest are contracting. That’s why they have been invited to join G20 Financial Stability Forum, the recession firefighting committee. As Newsweek says, the two other BRIC members, Brazil and Russia, might be more outspoken but the words of China and India will carry greater weight
Why is Obama not landing at Heathrow and instead reaching Stansted? Is Heathrow unsafe?
No, that’s not the reason. When Bush flew to Heathrow a few years ago, it caused lots of disruption to other flights. So Obama decided to land his Air Force One jet somewhere else. Five airports were considered, and Stansted found most convenient (although Ryanair passengers who use Stansted may not think so). Obama will land at Stansted’s executive Harrods terminal, whose facilities include a shop selling Harrods teddy bears
What’s G20? Who’s the 20?
Well it’s not 20. G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the US and whoever happens to hold the rotating EU presidency, currently the Czechs. But Spain and the Netherlands will also be there. The respective chairs of the New Partnership for Africa’s Development, the Association of Southeast Asian Nations and the African Union Commission, and the president of the EU Commission will also join the party. Not to forget the heads of UN, World Bank and IMF. Regular G20 meetings are for finance ministers and central bankers from what are described as “systemically important industrialised and developing economies”. This one is for the leaders of those economies because the world’s finances are in a mess.
Who are the first ladies to watch out for?
This was billed as the Michelle and Carla show. But the French first lady has made a last minute diplomatic withdrawal as the French would consider it a terrible lapse if the two first ladies were to meet for their style battle on British soil. But there’s Veronica Lario, Silvio Berlusconi’s wife, as long as she turns up.
Gordon Brown is hosting a lavish banquet. What’s the seating order?
No one is ready to give that out. According to protocol, the host and heads of state (as opposed to heads of government) should be seated towards the centre. Which probably means Manmohan Singh, head of the Indian government, will be out on the end. It’s also important to put VIPs next to people they might get on with. For the summit itself, it’s said that the “protocol of seating...is decided by the host country and based on a logical ordering system, for example alphabetical order”
The Times of India, April 1, 2009, Page 13
And what will be Brown’s return gift?
He will present goodie bags that will showcase “British creativity”. They will include a tie designed by one of three British tailors (Ozwald Boateng, Timothy Everest and Richard James), a tea towel from Ulster-based linen producer Thomas Ferguson Irish Linen, Kelly Hoppen candles, and Rococo chocolates. What about those world leaders who don’t wear ties — Will they get an alternative gift? It’s not known
Very little on the table
Stung by criticism about stuffing palates while talking poverty, Brown has taken the knife to the menu. The banquet has only 6 courses. According to some sources, two of them are asparagus as starters, Welsh lamb as the main course and flat bread.
What all will Obame bring?
Air Force One has a gym, electronic defence units and shielding to protect it from nuclear blasts. At Stansted, Obama will transfer to his helicopter Marine One, which has flares and anti-missile countermeasures to deal with heat-seeking and radar-guided missiles. Obama will travel around London aboard Cadillac One, which does eight miles to the gallon and is described as “a panic room on wheels”. It is equipped with shotguns, tear gas, a night-vision camera and bags of Obama’s blood (group AB). Among the 500 or so US personnel who will travel with the president are nurses and surgeons
How many Gs are there?
There’s G8: the seven richest nations with an extra place for Russia. The number after the G doesn’t have to be accurate. So G77, representing developing nations at the UN, has 130 members. But lower the number after the G, the more important it is. Some might argue that the most effective group within this G20 will be G2: US and China. We would like to believe that it will be G3: US, China and India.
Will there be protests?
There are protests planned for the City, east London, the West End and at many embassies around the capital most of Wednesday and Thursday. First off will be four simultaneous marches, led by effigies of the four horsemen of the Apocalypse, which will leave Moorgate, Liverpool Street, Cannon Street and London Bridge stations at 11am, converging on the Bank of England. The issues range from war, climate chaos, financial crimes and land enclosures. Meanwhile, 1,500 people plan to bring tents and erect a climate camp in the City outside the European Climate Exchange at Bishopsgate at lunchtime. On top of that, Stop The War Coalition will march from the US embassy in Grosvenor Square to Trafalgar Square in the afternoon.
Who will be the star of G20?
Dumb question. Barack Obama, of course. He is, as he said, ready to lead. The other traditional headline-grabbers is France’s Nicolas Sarkozy, as heavy a hitter internationally as he’s easily dismissed domestically. But the real star apart from Obama is likely to be China’s Wen Jiabao and India’s Manmohan Singh — leaders of two countries that are still growing while the rest are contracting. That’s why they have been invited to join G20 Financial Stability Forum, the recession firefighting committee. As Newsweek says, the two other BRIC members, Brazil and Russia, might be more outspoken but the words of China and India will carry greater weight
Why is Obama not landing at Heathrow and instead reaching Stansted? Is Heathrow unsafe?
No, that’s not the reason. When Bush flew to Heathrow a few years ago, it caused lots of disruption to other flights. So Obama decided to land his Air Force One jet somewhere else. Five airports were considered, and Stansted found most convenient (although Ryanair passengers who use Stansted may not think so). Obama will land at Stansted’s executive Harrods terminal, whose facilities include a shop selling Harrods teddy bears
What’s G20? Who’s the 20?
Well it’s not 20. G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the US and whoever happens to hold the rotating EU presidency, currently the Czechs. But Spain and the Netherlands will also be there. The respective chairs of the New Partnership for Africa’s Development, the Association of Southeast Asian Nations and the African Union Commission, and the president of the EU Commission will also join the party. Not to forget the heads of UN, World Bank and IMF. Regular G20 meetings are for finance ministers and central bankers from what are described as “systemically important industrialised and developing economies”. This one is for the leaders of those economies because the world’s finances are in a mess.
Who are the first ladies to watch out for?
This was billed as the Michelle and Carla show. But the French first lady has made a last minute diplomatic withdrawal as the French would consider it a terrible lapse if the two first ladies were to meet for their style battle on British soil. But there’s Veronica Lario, Silvio Berlusconi’s wife, as long as she turns up.
Gordon Brown is hosting a lavish banquet. What’s the seating order?
No one is ready to give that out. According to protocol, the host and heads of state (as opposed to heads of government) should be seated towards the centre. Which probably means Manmohan Singh, head of the Indian government, will be out on the end. It’s also important to put VIPs next to people they might get on with. For the summit itself, it’s said that the “protocol of seating...is decided by the host country and based on a logical ordering system, for example alphabetical order”
Global crisis swallows 43% investor wealth
Global crisis swallows 43% investor wealth
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
PK Dey, Mumbai
The year 2008-09 has been a bad year for investors with more than 43% erosion in their wealth taking place during the year.
US subprime crisis, higher inflation and world economic crisis were responsible for this erosion. Investors have lost Rs 22.77 lakh crore in their wealth in the last 243 trading sessions on the Bombay Stock Exchange during 2008-09.
Harish Menon, ED, H-Zone Capital Management, said, “FY2009 has been nothing short of a disaster for risky asset classes across the global financial markets. Rising interest rates coupled with drying up of market liquidity triggered a largescale sell-off in Indian equities despite relatively better economic fundamentals.”
“With most sectors and stocks trading at near life-high valuations, flight to safety resulted in a massive correction in prices and valuations of most stocks,especially those in the real estate and commodities-related sectors, were the biggest beneficiaries of the liquidity deluge of the preceding few years,” he added.
The total BSE M-Cap has decreased to Rs 30.58 lakh crore on March 31, 2009, from Rs 53.35 lakh crore on April 1, 2008. Also, on the National Stock Exchange, the M-Cap decreased by Rs 21.61 lakh crore to Rs 28.90 lakh crore from the level of Rs 50.52 lakh crore on April 1, 2008. During the 12 months of 2008-09, the highest decline and increase was seen in the month of October and April respectively.
The Sensex decreased by 5918.12 points to 9,708.50 on March 31, 2009 from 15,626.62 on April 1, 2008. The Nifty, on the other hand, decreased by 1,718.60 points to 3020.95 from its previous level of 4739.55 on April 1, 2008.
A sectoral analysis shows that while the construction sector in terms of market cap has decreased by 71.07% during the study period, the erosion of sectors like retailing, shipping, media, steel, food-processing, jewellery and oil drilling/allied services have been far higher in losing overall market cap values. In contrast, FMCG, cigarettes, pharmaceuticals were laggards, and saw a lower erosion in market cap compared to April 1, 2008.
Among the major industrial houses, significant decrease in M-Cap was seen in the case of K K Birla, Essar, Jaiprakash Gaur ,UB, ADAG, Shiv Nadar, Godrej, Jindal Om Prakash, Subhash Chandra and Brij Mohan Thapar. The M-Cap of the Reliance Industry Group led by Mukesh Ambani decreased by 36.5% from Rs 4.45 lakh crore to Rs 2.83 lakh crore during the study period. The M-Cap of 196 A group firms, which lost significantly, decreased by 53% from Rs 57.28 lakh crore to Rs 26.82 lakh crore on March 31, 2009. Among the A group companies, significant decrease in M-Cap was seen in the case of NMDC, Unitech, Jai Corp and Suzlon Energy . A reverse trend was seen in the case of Spice Communications, Hero Honda Motors, Lupin,Castrol and Colgate Palmolive. Reliance Industries kept its top rank intact in 2008-09. But it lost its value by Rs 1.29 lakh crore. Among the PSU stocks, ONGC lost Rs 0.49 lakh crore to its M-Cap during the same period. MMTC lost significant amount in M-Cap, which decreased by Rs 37,956 crore during the period.
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
PK Dey, Mumbai
The year 2008-09 has been a bad year for investors with more than 43% erosion in their wealth taking place during the year.
US subprime crisis, higher inflation and world economic crisis were responsible for this erosion. Investors have lost Rs 22.77 lakh crore in their wealth in the last 243 trading sessions on the Bombay Stock Exchange during 2008-09.
Harish Menon, ED, H-Zone Capital Management, said, “FY2009 has been nothing short of a disaster for risky asset classes across the global financial markets. Rising interest rates coupled with drying up of market liquidity triggered a largescale sell-off in Indian equities despite relatively better economic fundamentals.”
“With most sectors and stocks trading at near life-high valuations, flight to safety resulted in a massive correction in prices and valuations of most stocks,especially those in the real estate and commodities-related sectors, were the biggest beneficiaries of the liquidity deluge of the preceding few years,” he added.
The total BSE M-Cap has decreased to Rs 30.58 lakh crore on March 31, 2009, from Rs 53.35 lakh crore on April 1, 2008. Also, on the National Stock Exchange, the M-Cap decreased by Rs 21.61 lakh crore to Rs 28.90 lakh crore from the level of Rs 50.52 lakh crore on April 1, 2008. During the 12 months of 2008-09, the highest decline and increase was seen in the month of October and April respectively.
The Sensex decreased by 5918.12 points to 9,708.50 on March 31, 2009 from 15,626.62 on April 1, 2008. The Nifty, on the other hand, decreased by 1,718.60 points to 3020.95 from its previous level of 4739.55 on April 1, 2008.
A sectoral analysis shows that while the construction sector in terms of market cap has decreased by 71.07% during the study period, the erosion of sectors like retailing, shipping, media, steel, food-processing, jewellery and oil drilling/allied services have been far higher in losing overall market cap values. In contrast, FMCG, cigarettes, pharmaceuticals were laggards, and saw a lower erosion in market cap compared to April 1, 2008.
Among the major industrial houses, significant decrease in M-Cap was seen in the case of K K Birla, Essar, Jaiprakash Gaur ,UB, ADAG, Shiv Nadar, Godrej, Jindal Om Prakash, Subhash Chandra and Brij Mohan Thapar. The M-Cap of the Reliance Industry Group led by Mukesh Ambani decreased by 36.5% from Rs 4.45 lakh crore to Rs 2.83 lakh crore during the study period. The M-Cap of 196 A group firms, which lost significantly, decreased by 53% from Rs 57.28 lakh crore to Rs 26.82 lakh crore on March 31, 2009. Among the A group companies, significant decrease in M-Cap was seen in the case of NMDC, Unitech, Jai Corp and Suzlon Energy . A reverse trend was seen in the case of Spice Communications, Hero Honda Motors, Lupin,Castrol and Colgate Palmolive. Reliance Industries kept its top rank intact in 2008-09. But it lost its value by Rs 1.29 lakh crore. Among the PSU stocks, ONGC lost Rs 0.49 lakh crore to its M-Cap during the same period. MMTC lost significant amount in M-Cap, which decreased by Rs 37,956 crore during the period.
Stress test
Stress test
The Hindu Business Line, April 1, 2009, Page 8
--------------------------------------------------------------------------------
The CFSA’s prescriptions will have to be acted upon sooner than later to ensure that banks are ready for the recovery.
--------------------------------------------------------------------------------
Four years after the Asian currency crisis of 1997, India participated in an IMF/World Bank financial assessment programme whose stress tests were formalised in 2005 for member countries. The following year, India voluntarily began a joint exercise by the Finance Ministry and the Reserve Bank of India to assess the impact of its ongoing reforms on Indian banks. The exhaustive report of the Committee on Financial Sector Assessment (CFSA) has examined the health of the finan cial system at a most appropriate time given the searing pace of growth till last year and the global shocks that followed. Its verdict is a favourable one; in these dangerous times when the developed world is witnessing the implosion of leading banks, the Indian financial structure stands virtually unscathed; a bit shaken perhaps but still in business.
The CFSA bases its “health check” on some commonly accepted parameters: Indian banks, it finds, have managed to reduce their cost-to-income ratio from 61.2 per cent in 2001 to 48.9 per cent in 2007-08; the average capital adequacy ratio is comfortable at over 12 per cent while NPAs have fallen dramatically from 7.1 per cent in 2001 to around one per cent seven years later, although the CFSA could not have accounted for the recent downtrend that may lead to a greater reneging on debt and bad loans. The question now is: what next? The CFSA provides a road map on the basis of an 8 per cent expansion in GDP. The Committee, therefore, considers it necessary for capital injection to equip banks to serve expanding needs. Treading familiar territory the Committee leaves the Government two options: one is, of course, for it to dilute majority stake so that banks can access funds from elsewhere. Since that requires time-consuming legislation, amalgamation of public sector banks provides a way of augmenting their capital base. Clearly, the first option is the better for its other advantages; greater autonomy may allow banks to modernise faster and alter outdated personnel policies to constantly attract newer talent. The Committee also considers a greater role for foreign banks. Permission to expand must be reciprocated by similar opportunities for Indian banks; also foreign banks must cater to the rural and small sector. But if they have to abide by this need, they must be allowed to open more branches than they are currently.
With elections round the corner, the Committee’s prescriptions will have to wait till after the new Government is formed. But they will have to be acted upon sooner than later to ensure that when the recovery comes banks are ready to lend more than a helping hand.
The Hindu Business Line, April 1, 2009, Page 8
--------------------------------------------------------------------------------
The CFSA’s prescriptions will have to be acted upon sooner than later to ensure that banks are ready for the recovery.
--------------------------------------------------------------------------------
Four years after the Asian currency crisis of 1997, India participated in an IMF/World Bank financial assessment programme whose stress tests were formalised in 2005 for member countries. The following year, India voluntarily began a joint exercise by the Finance Ministry and the Reserve Bank of India to assess the impact of its ongoing reforms on Indian banks. The exhaustive report of the Committee on Financial Sector Assessment (CFSA) has examined the health of the finan cial system at a most appropriate time given the searing pace of growth till last year and the global shocks that followed. Its verdict is a favourable one; in these dangerous times when the developed world is witnessing the implosion of leading banks, the Indian financial structure stands virtually unscathed; a bit shaken perhaps but still in business.
The CFSA bases its “health check” on some commonly accepted parameters: Indian banks, it finds, have managed to reduce their cost-to-income ratio from 61.2 per cent in 2001 to 48.9 per cent in 2007-08; the average capital adequacy ratio is comfortable at over 12 per cent while NPAs have fallen dramatically from 7.1 per cent in 2001 to around one per cent seven years later, although the CFSA could not have accounted for the recent downtrend that may lead to a greater reneging on debt and bad loans. The question now is: what next? The CFSA provides a road map on the basis of an 8 per cent expansion in GDP. The Committee, therefore, considers it necessary for capital injection to equip banks to serve expanding needs. Treading familiar territory the Committee leaves the Government two options: one is, of course, for it to dilute majority stake so that banks can access funds from elsewhere. Since that requires time-consuming legislation, amalgamation of public sector banks provides a way of augmenting their capital base. Clearly, the first option is the better for its other advantages; greater autonomy may allow banks to modernise faster and alter outdated personnel policies to constantly attract newer talent. The Committee also considers a greater role for foreign banks. Permission to expand must be reciprocated by similar opportunities for Indian banks; also foreign banks must cater to the rural and small sector. But if they have to abide by this need, they must be allowed to open more branches than they are currently.
With elections round the corner, the Committee’s prescriptions will have to wait till after the new Government is formed. But they will have to be acted upon sooner than later to ensure that when the recovery comes banks are ready to lend more than a helping hand.
Citi cuts home loan rates, other foreign banks wait
Citi cuts home loan rates, other foreign banks wait
Business Standard, April 1, 2009, Section II, Page 2
BS Reporters / Mumbai/ Bangalore
A foreign bank has finally reduced its interest rate. Citibank today said that it will lower its home loan rates by 50 basis points.
The bank, which had announced a similar cut in January, will see its mortgage prime rate fall to 13.75 per cent from April 1. In a statement, the bank said that the benefit will be available to all its existing customers on floating rate loans. A bank spokesperson said that, depending on loan tenure and amount as well as the customer’s relationship with the bank, he could get a loan at up to 50 basis points lower than the benchmark rate.
HSBC, which has considerably scaled down lending activity, refused to comment on its future course of action saying it did not make forward looking statements.
RATE CARD
Reduction BPLR
Vijaya Bank 50 12.00
Bank of Baroda 50 12.00
Bank of India 50 12.00
Union Bank of India 50 12.00
Oriental Bank of Commerce 50 12.00
Central Bank of India 50 12.00
Uco Bank 50 12.00
HDFC* 50 14.00
Allahabad Bank 25 12.25
Andhra Bank 25 12.25
United Bank of India 25 12.25
Business Standard, April 1, 2009, Section II, Page 2
BS Reporters / Mumbai/ Bangalore
A foreign bank has finally reduced its interest rate. Citibank today said that it will lower its home loan rates by 50 basis points.
The bank, which had announced a similar cut in January, will see its mortgage prime rate fall to 13.75 per cent from April 1. In a statement, the bank said that the benefit will be available to all its existing customers on floating rate loans. A bank spokesperson said that, depending on loan tenure and amount as well as the customer’s relationship with the bank, he could get a loan at up to 50 basis points lower than the benchmark rate.
HSBC, which has considerably scaled down lending activity, refused to comment on its future course of action saying it did not make forward looking statements.
RATE CARD
Reduction BPLR
Vijaya Bank 50 12.00
Bank of Baroda 50 12.00
Bank of India 50 12.00
Union Bank of India 50 12.00
Oriental Bank of Commerce 50 12.00
Central Bank of India 50 12.00
Uco Bank 50 12.00
HDFC* 50 14.00
Allahabad Bank 25 12.25
Andhra Bank 25 12.25
United Bank of India 25 12.25
Reduction in basis points, benchmark prime lending rate (BPLR)in per centHDFC cut its retail prime lending rate with effect fromMarch 25, while the other cuts are effective April 1Source: Banks
Despite repeated monetary policy measures initiated by the Reserve Bank of India to step up credit flow, foreign banks and private players, such as ICICI Bank, have not lowered lending rates. As a result, their growth in the Indian market has slowed down considerably. Lenders such as ICICI Bank, which have not pared rates, have opted to lower home loan rates.
Public sector banks have, however, responded with repeated rate cuts, which together add up to 200 basis points. Even today, two government-owned players –Vijaya Bank and CanFin Homes (CFHL) – have announced rate cuts.
Canara Bank said its benchmark prime lending rate will be lowered by 50 basis points to 12 per cent from tomorrow. Interest rates on personal loans as well as existing home loans, which are linked to the BPLR, will also come down by 50 basis points, the bank said in a release.
Canara Bank-promoted CanFin Homes has announced a 50-basis-point reduction in its variable interest rate loans for existing and fresh individual housing loans with effect from April 1, 2009. This is the second rate reduction by the company in the last three months.
The new rates for all fresh variable rate loans are 9.25 per cent for loans up to Rs 30 lakh and 10.25 per cent for loans above Rs 30 lakh. The revised rate of interest on fixed rate loans is 12.25 per cent. The reduced rates are applicable for all repayment periods. CFHL also has reduced the front-end fee to 0.50 per cent from the existing 0.75 per cent, the bank said in a statement.
PNB reduces retail term deposit rates
Meanwhile, Punjab National Bank (PNB) said that it will realign the interest rates on retail term deposits. The bank has reduced the rate by 50-100 basis points (bps) for term deposits below three years. This is applicable on a deposit of 91 to 179 days and deposits over two years but less than three years.
“There is no change in interest rates on other term deposits, with peak rate of 8 per cent offered for deposits of 3 years to less than 5 years,” the bank said in a statement to the Bombay Stock Exchange.
Banks such as State Bank of India have already announced a reduction in bulk deposit rates as part of their efforts to lower the cost of funds.
High fiscal defict delaying pvt sector investment: CII
High fiscal defict delaying pvt sector investment: CII
The Economic Times, April 1, 2009, Page 17
Our Bureau & Agencies NEW DELHI
HIGH fiscal deficit due to government borrowings is preventing interest rates to fall further, delaying private sector investments in the economy, the newly elected president of industry body CII, Venu Srinivasan said on Tuesday.
Pointing out that the combined fiscal deficit of the central and state governments is more than 10%, he said: “Monetising the deficit and improving the currency flow is very important, or else investments will dry up in the country.”
Mr Srinivasan said that if banks buy bonds, instead of lending, borrowing will shrink, which will impact economic growth. “In spite of the government’s measures and RBI’s decision to reduce policy rates, credit to the industry is still scarce and expensive,” he said.
He also asked the government to print more currency notes to bridge fiscal deficit and keep the economy afloat, which is reeling under the impact of global financial meltdown. “If the government is going to borrow from the market to fill the fiscal deficit, then they are going to suck up all the money available in the banks and we will be crowded out,” new CII president Venu Srinivasan said.
Pitching for monetisation of the budget deficit, he said, “It means printing notes. Which means you have the risk of increasing inflation but at the same time you will keep the economy afloat.” He further said that government should also amend the Fiscal Responsibility and Budget Management Act, which imposes restrictions on public expenditure. Raising concerns over the government’s decision to raise an additional Rs 3,00,000 crore during 2009-10 to fund public expenditure, CII chief said very little money would be left for the private sector. He further added that the central bank should further cut repo and reverse repo rates by another 50 basis points. “However, this would only be effective if bond yields start reflecting the actual health of the economy,” he added.
Talking about growth, he said that the Indian economy is expected to grow at around 6.5%, as per the forecast made by International Monetary Fund (IMF) in 2009-10 and stressed on boosting the share of manufacturing sector in GDP. “It is imperative to reduce competitive disadvantages faced by Indian companies in relation to power and transportation infrastructure. High interest and infrastructure costs have put Indian manufacturing at about 15% cost disadvantage, compared to their peers in other emerging economies,” Mr Srinivasan said.
He said, the implementation of goods and services tax (GST), scheduled for April 2010, would unify the Indian market but the government should announce a detailed road map and framework before implementing it next year. “GST would be useful only if it is unified and industry has to deal with tax authorities at one location only.” He also announced the three priority areas for CII for the next one year. These include economic revival through stimulating manufacturing sector and renewed focus on services besides focusing on infrastructure development and governance.
Mr Srinivasan, also the chairman and managing director of two wheeler maker TVS Motor, sought fundamental changes in the automobile sector. Referring to the system of repossession of vehicles from loan defaulters, he said that the entire process should be made easier to encourage banks to extend retail finance in the automotive sector. “Banks would not come forward and lend unless they are allowed to repossess vehicles on which money is outstanding,” he said.
Banks had scaled down retail auto finance as recovery and repossession from defaulters became a problem which slowed retail financing and brought down sales in the industry. Although auto sales picked up in the beginning of this year, Mr Srinivasan said that that growth in the two-wheeler industry is expected to be in single digit in the coming quarters.
The Economic Times, April 1, 2009, Page 17
Our Bureau & Agencies NEW DELHI
HIGH fiscal deficit due to government borrowings is preventing interest rates to fall further, delaying private sector investments in the economy, the newly elected president of industry body CII, Venu Srinivasan said on Tuesday.
Pointing out that the combined fiscal deficit of the central and state governments is more than 10%, he said: “Monetising the deficit and improving the currency flow is very important, or else investments will dry up in the country.”
Mr Srinivasan said that if banks buy bonds, instead of lending, borrowing will shrink, which will impact economic growth. “In spite of the government’s measures and RBI’s decision to reduce policy rates, credit to the industry is still scarce and expensive,” he said.
He also asked the government to print more currency notes to bridge fiscal deficit and keep the economy afloat, which is reeling under the impact of global financial meltdown. “If the government is going to borrow from the market to fill the fiscal deficit, then they are going to suck up all the money available in the banks and we will be crowded out,” new CII president Venu Srinivasan said.
Pitching for monetisation of the budget deficit, he said, “It means printing notes. Which means you have the risk of increasing inflation but at the same time you will keep the economy afloat.” He further said that government should also amend the Fiscal Responsibility and Budget Management Act, which imposes restrictions on public expenditure. Raising concerns over the government’s decision to raise an additional Rs 3,00,000 crore during 2009-10 to fund public expenditure, CII chief said very little money would be left for the private sector. He further added that the central bank should further cut repo and reverse repo rates by another 50 basis points. “However, this would only be effective if bond yields start reflecting the actual health of the economy,” he added.
Talking about growth, he said that the Indian economy is expected to grow at around 6.5%, as per the forecast made by International Monetary Fund (IMF) in 2009-10 and stressed on boosting the share of manufacturing sector in GDP. “It is imperative to reduce competitive disadvantages faced by Indian companies in relation to power and transportation infrastructure. High interest and infrastructure costs have put Indian manufacturing at about 15% cost disadvantage, compared to their peers in other emerging economies,” Mr Srinivasan said.
He said, the implementation of goods and services tax (GST), scheduled for April 2010, would unify the Indian market but the government should announce a detailed road map and framework before implementing it next year. “GST would be useful only if it is unified and industry has to deal with tax authorities at one location only.” He also announced the three priority areas for CII for the next one year. These include economic revival through stimulating manufacturing sector and renewed focus on services besides focusing on infrastructure development and governance.
Mr Srinivasan, also the chairman and managing director of two wheeler maker TVS Motor, sought fundamental changes in the automobile sector. Referring to the system of repossession of vehicles from loan defaulters, he said that the entire process should be made easier to encourage banks to extend retail finance in the automotive sector. “Banks would not come forward and lend unless they are allowed to repossess vehicles on which money is outstanding,” he said.
Banks had scaled down retail auto finance as recovery and repossession from defaulters became a problem which slowed retail financing and brought down sales in the industry. Although auto sales picked up in the beginning of this year, Mr Srinivasan said that that growth in the two-wheeler industry is expected to be in single digit in the coming quarters.
CII tells govt to pump in more money
CII tells govt to pump in more money
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
fe Bureau, New Delhi
The Confederation of Indian Industry (CII) on Tuesday urged the government to print more currency notes to bridge the fiscal deficit and keep the economy afloat, which is reeling under the impact of the global financial meltdown.
“If the government is going to borrow from the market to fill the fiscal deficit, then they are going to suck up all the money available in the banks and we will be drained out,” new CII president Venu Srinivasan told reporters at his maiden press conference.
Pitching for monetisation of the Budget deficit, he said, “It means printing notes. Which means you have the risk of increasing inflation but at the same time you will keep the economy afloat.” Srinivasan further said that the government should also amend the Fiscal Responsibility and Budget Management Act, which imposes restrictions on public expenditure.
Raising concerns over the government’s decision to raise an additional Rs 300,000 crore during 2009-10 to fund public expenditure, the CII president said that very little money would be left for the private sector.
Adding off-budget items and state deficits, total government deficit is likely to be in excess of 10% of the GDP, he said, adding revenue deficit accounts for over 70% of the fiscal deficit.
Asked whether monetisation would help or not, Srinivasan said, “Otherwise, with such a high level of deficit, you will find investments drying up in the country.”
He also said that the government should further reduce key interest rates like repo (short-term lending rate) and reverse repo rates. “There is need to reduce repo and reverse repo rates by 50 basis points,” he added.
He said that at the current rates several projects are still not viable.
While ruling out any possibility about the country slipping into deflation, Srinivasan said that the government should not publish the inflation data weekly.
“High borrowing is keeping interest rates from falling in line with inflation,” he said.
Suggesting more fiscal measures, he said that the government should further ease the indirect taxes – excise, service tax for specific sectors.
He also said that to avoid injury to the domestic industry owing to artificially low-priced imports, an aggressive safeguard mechanism needs to be in place.
“This could be supplemented by strengthening anti-dumping directorate,” he said.
To deal with the land acquisition issues to stimulate the manufacturing sector, he said that the government should acquire land systematically and transfer it to industry in a transparent manner.
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
fe Bureau, New Delhi
The Confederation of Indian Industry (CII) on Tuesday urged the government to print more currency notes to bridge the fiscal deficit and keep the economy afloat, which is reeling under the impact of the global financial meltdown.
“If the government is going to borrow from the market to fill the fiscal deficit, then they are going to suck up all the money available in the banks and we will be drained out,” new CII president Venu Srinivasan told reporters at his maiden press conference.
Pitching for monetisation of the Budget deficit, he said, “It means printing notes. Which means you have the risk of increasing inflation but at the same time you will keep the economy afloat.” Srinivasan further said that the government should also amend the Fiscal Responsibility and Budget Management Act, which imposes restrictions on public expenditure.
Raising concerns over the government’s decision to raise an additional Rs 300,000 crore during 2009-10 to fund public expenditure, the CII president said that very little money would be left for the private sector.
Adding off-budget items and state deficits, total government deficit is likely to be in excess of 10% of the GDP, he said, adding revenue deficit accounts for over 70% of the fiscal deficit.
Asked whether monetisation would help or not, Srinivasan said, “Otherwise, with such a high level of deficit, you will find investments drying up in the country.”
He also said that the government should further reduce key interest rates like repo (short-term lending rate) and reverse repo rates. “There is need to reduce repo and reverse repo rates by 50 basis points,” he added.
He said that at the current rates several projects are still not viable.
While ruling out any possibility about the country slipping into deflation, Srinivasan said that the government should not publish the inflation data weekly.
“High borrowing is keeping interest rates from falling in line with inflation,” he said.
Suggesting more fiscal measures, he said that the government should further ease the indirect taxes – excise, service tax for specific sectors.
He also said that to avoid injury to the domestic industry owing to artificially low-priced imports, an aggressive safeguard mechanism needs to be in place.
“This could be supplemented by strengthening anti-dumping directorate,” he said.
To deal with the land acquisition issues to stimulate the manufacturing sector, he said that the government should acquire land systematically and transfer it to industry in a transparent manner.
Organised retail likely to slow down
Organised retail likely to slow down
The Economic Times, April 1, 2009, Page 18
Our Bureau NEW DELHI
THE economic slowdown will hamper the growth of the Indian retail sector for another 12-18 months, with lower sales and increasing liquidity pressure for many domestic retailers. Falling footfalls and poor conversion ratio have led to a decline in sales growth to 11% in December 2008 compared to 35% in December 2007, consulting firm KPMG said in a report.
In a survey conducted by KPMG, 70% of the respondents stated that the slowdown has adversely affected their footfalls. The consulting firm predicts that retailers would shift from lifestyle retailing to value retail in the coming months. This is expected to fuel action in food retailing and other FMCG products as the segment is insulated from the slowdown while home furnishing products are expected to lose favour of retailers.
Organised retail sector was expected to touch penetration levels of 16% by 2012, which has now been revised to 10.5%. Currently, the sector has a penetration level of about 5%. This dip can be largely attributed to the shaken sentiments of retailers. According to the report, many players are likely to close down unprofitable stores and rationalise expenditure in the next few months. Industry players are also expected to opt out of high-cost locations such as shopping malls and opt for low-rent premises. KPMG has suggested that retailers move to rural and remote areas as the metro circles are increasingly getting saturated.
In addition, the investment in the retail sector has also been delayed with several retail real estate development stalled. The organised retail sector was expected to attract investments of $25 billion over the next five years. According to KPMG report, a large number of retailers have not been able to meet their stated expansion plans. With higher cost of fund raising and a slowdown in demand, developers are likely to delay more projects in the future.
The Economic Times, April 1, 2009, Page 18
Our Bureau NEW DELHI
THE economic slowdown will hamper the growth of the Indian retail sector for another 12-18 months, with lower sales and increasing liquidity pressure for many domestic retailers. Falling footfalls and poor conversion ratio have led to a decline in sales growth to 11% in December 2008 compared to 35% in December 2007, consulting firm KPMG said in a report.
In a survey conducted by KPMG, 70% of the respondents stated that the slowdown has adversely affected their footfalls. The consulting firm predicts that retailers would shift from lifestyle retailing to value retail in the coming months. This is expected to fuel action in food retailing and other FMCG products as the segment is insulated from the slowdown while home furnishing products are expected to lose favour of retailers.
Organised retail sector was expected to touch penetration levels of 16% by 2012, which has now been revised to 10.5%. Currently, the sector has a penetration level of about 5%. This dip can be largely attributed to the shaken sentiments of retailers. According to the report, many players are likely to close down unprofitable stores and rationalise expenditure in the next few months. Industry players are also expected to opt out of high-cost locations such as shopping malls and opt for low-rent premises. KPMG has suggested that retailers move to rural and remote areas as the metro circles are increasingly getting saturated.
In addition, the investment in the retail sector has also been delayed with several retail real estate development stalled. The organised retail sector was expected to attract investments of $25 billion over the next five years. According to KPMG report, a large number of retailers have not been able to meet their stated expansion plans. With higher cost of fund raising and a slowdown in demand, developers are likely to delay more projects in the future.
Real estate prices set for 20% downward correction
Real estate prices set for 20% downward correction
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
Mona Mehta, Mumbai
Real estate developers are planning another round of price correction – from 15% to 20% – during the second quarter of fiscal 2010 in certain metros. This comes at a time when some top builders are feeling the pressure to sell off their standing inventories as they have no other option left but cut real estate prices further, says industry experts. Recently, the government announced a third stimulus package after which realty bigwigs are striving hard towards affordable housing development and converting them into actual sales by announcing 25% to 40% dip in property prices.
Lalit Kumar Jain, chairman, Kumar Builders, and vice-president, CREDAI, told FE, “We are evaluating plans to reduce prices of affordable apartments by another 15% to 20% before Diwali. Due to the economic slowdown, end buyers are saving more, instead of investing in properties. Hence, we believe interest rates could be reduced further during the next quarter which end-buyers are currently awaiting.”
A top official from Kalpataru Properties, on condition of anonymity, said that developers who have acquired land at least six years back will be able to offer homes at affordable current market rates unlike developers who would have recently bought land during prevailing market rate in fiscal 2009. “We expect huge demand to emerge in the real estate market in the next two to three months once the interest rates are reduced further. We have reduced property prices by 35% in December 2008 in western suburbs and are witnessing huge inquiries,” he added. Anshul Jain, CEO-India, DTZ International Property Advisors, said, “There is a need for high-end residential property prices to drop by 35%, and mid-end to come down by 25% from the peak prices based on the localities. Builders have been offering free gifts, cars, followed by discounting of prices but not to the extent of 35%, especially for new projects. Further discounts is only going to add before the peak prices in general. Hence, builders will move on the right track if they cut property prices further.”
Despite using private equity funds is becoming more expensive for developers, private equity investments are expected to continue as valuations are becoming more realistic, he added.
The Financial Express – Corporates & Markets, April 1, 2009, P VIII
Mona Mehta, Mumbai
Real estate developers are planning another round of price correction – from 15% to 20% – during the second quarter of fiscal 2010 in certain metros. This comes at a time when some top builders are feeling the pressure to sell off their standing inventories as they have no other option left but cut real estate prices further, says industry experts. Recently, the government announced a third stimulus package after which realty bigwigs are striving hard towards affordable housing development and converting them into actual sales by announcing 25% to 40% dip in property prices.
Lalit Kumar Jain, chairman, Kumar Builders, and vice-president, CREDAI, told FE, “We are evaluating plans to reduce prices of affordable apartments by another 15% to 20% before Diwali. Due to the economic slowdown, end buyers are saving more, instead of investing in properties. Hence, we believe interest rates could be reduced further during the next quarter which end-buyers are currently awaiting.”
A top official from Kalpataru Properties, on condition of anonymity, said that developers who have acquired land at least six years back will be able to offer homes at affordable current market rates unlike developers who would have recently bought land during prevailing market rate in fiscal 2009. “We expect huge demand to emerge in the real estate market in the next two to three months once the interest rates are reduced further. We have reduced property prices by 35% in December 2008 in western suburbs and are witnessing huge inquiries,” he added. Anshul Jain, CEO-India, DTZ International Property Advisors, said, “There is a need for high-end residential property prices to drop by 35%, and mid-end to come down by 25% from the peak prices based on the localities. Builders have been offering free gifts, cars, followed by discounting of prices but not to the extent of 35%, especially for new projects. Further discounts is only going to add before the peak prices in general. Hence, builders will move on the right track if they cut property prices further.”
Despite using private equity funds is becoming more expensive for developers, private equity investments are expected to continue as valuations are becoming more realistic, he added.
After DLF, Unitech has restive customers to soothe
After DLF, Unitech has restive customers to soothe
Business Standard, April 1, 2009, Page 5
Joe C Mathew / New Delhi
Unitech Ltd, the country’s second-largest realty player, is having to handle customer ire at one of its premium housing projects in the suburban city of Gurgaon.
This comes right after DLF, the largest property developer, brought out a range of measures to soothe restive customers at a couple of other housing projects at Gurgaon.
The Unitech customer ire is due to alleged delay in completion of World Spa, apartments and villas that carry an average price tag of over Rs 1 crore per unit. “The property was scheduled for delivery in the second half of 2006. Two years later, more than half has not yet been delivered, with no completion date in sight. And the complex is far from finished,” complained a customer.
Customers said their mails and pleas to Unitech had been ignored. World Spa has over 350 apartments in two projects — Spa East and Spa West. While there are 159 apartments in five towers in the East, the Spa West has six towers that house 208 apartments. Customers say Unitech has collected over Rs 450 crore, constituting 90 per cent of the payment.
Unitech officials, however, deny the charges and say the project is on track. “The release of World Spa has started and all six towers in Spa East have been offered for possession. One tower in Spa West has also been released. The rest of the towers will be released progressively in the next few months,” said a spokesperson.
Company officials said the delay in Spa West was caused by customers’ demand for structural changes. “The West towers are structurally complete and finishing touches need some more months. The delay happened after a group of buyers approached us in 2007, asking for major changes in the project. We tried to incorporate the changes, hence the delay,” said the officials.
Unitech added the payments were “construction linked”, which suggested that 90 per cent payment would mean that 95 per cent of the project was complete. The company is planning to meet the customers during the week to clear their apprehensions.
The customers are yet to be convinced. They are hinting at beginning with peaceful public demonstrations to “sensitise” Unitech.
Customers complain that cash-strapped realty majors are delaying the completion of residential projects after taking hefty advance payments. To address such feelings, DLF is in the process of announcing project-specific “relief packages” — including price cuts — for its customers.
Business Standard, April 1, 2009, Page 5
Joe C Mathew / New Delhi
Unitech Ltd, the country’s second-largest realty player, is having to handle customer ire at one of its premium housing projects in the suburban city of Gurgaon.
This comes right after DLF, the largest property developer, brought out a range of measures to soothe restive customers at a couple of other housing projects at Gurgaon.
The Unitech customer ire is due to alleged delay in completion of World Spa, apartments and villas that carry an average price tag of over Rs 1 crore per unit. “The property was scheduled for delivery in the second half of 2006. Two years later, more than half has not yet been delivered, with no completion date in sight. And the complex is far from finished,” complained a customer.
Customers said their mails and pleas to Unitech had been ignored. World Spa has over 350 apartments in two projects — Spa East and Spa West. While there are 159 apartments in five towers in the East, the Spa West has six towers that house 208 apartments. Customers say Unitech has collected over Rs 450 crore, constituting 90 per cent of the payment.
Unitech officials, however, deny the charges and say the project is on track. “The release of World Spa has started and all six towers in Spa East have been offered for possession. One tower in Spa West has also been released. The rest of the towers will be released progressively in the next few months,” said a spokesperson.
Company officials said the delay in Spa West was caused by customers’ demand for structural changes. “The West towers are structurally complete and finishing touches need some more months. The delay happened after a group of buyers approached us in 2007, asking for major changes in the project. We tried to incorporate the changes, hence the delay,” said the officials.
Unitech added the payments were “construction linked”, which suggested that 90 per cent payment would mean that 95 per cent of the project was complete. The company is planning to meet the customers during the week to clear their apprehensions.
The customers are yet to be convinced. They are hinting at beginning with peaceful public demonstrations to “sensitise” Unitech.
Customers complain that cash-strapped realty majors are delaying the completion of residential projects after taking hefty advance payments. To address such feelings, DLF is in the process of announcing project-specific “relief packages” — including price cuts — for its customers.
Cement prices may go up from today
Cement prices may go up from today
Business Standard, April 1, 2009, Section II, Page 4
BS Reporter / Mumbai
Cement prices could strengthen in the range of Rs 3 to 8 per 50-kg bag in Maharashtra and Gujarat from tomorrow. According to manufacturers, the price hike is likely to be effected in other parts of the country also, depending on market response.
Mumbai-based dealers confirmed the move. Sanjay Ladiwala, president, Cement Stockists and Dealers Association of Bombay, told Business Standard that companies had informed the association of a price hike of Rs 3-8 per bag. It will be effective from April 1.
When contacted, ACC, the largest cement maker, refused to comment. Amrit Lal Kapur, managing director of ACC’s sister company Ambuja Cements, said, “We have not approved any hike in prices in the recent past. Though demand is good, I do not think it will continue for long.”Presently, in Mumbai, cement prices in the trade segment is Rs 262 a bag which will be raised to Rs 265 whereas in the non-trade segment, the prevailing price of Rs 250-253 a bag will rise to Rs 255-258.
Industry analysts pointed out that this price rise may not be restricted to one market. “The eastern market, which is one of the strongest consuming centre, is facing the same situation,” said a city-based manufacturer. Dealers in Kolkata confirmed that there had been a rise of Rs 5-7 a bag in the past one week.
Vinod Juneja, managing director of Binani Cement said, “There has to be an increase in prices. In North too, price rise cannot be ruled out.”
When contacted, Hari Mohan Bangur, president of Cement Manufacturers’ Association and chairman & managing director of Shree Cement, a dominant player in the North, said a decision on price would be taken after a few days.
The northern region has already seen a spate of price increases this year, which has made cement costlier by Rs 10-14 a bag.
Business Standard, April 1, 2009, Section II, Page 4
BS Reporter / Mumbai
Cement prices could strengthen in the range of Rs 3 to 8 per 50-kg bag in Maharashtra and Gujarat from tomorrow. According to manufacturers, the price hike is likely to be effected in other parts of the country also, depending on market response.
Mumbai-based dealers confirmed the move. Sanjay Ladiwala, president, Cement Stockists and Dealers Association of Bombay, told Business Standard that companies had informed the association of a price hike of Rs 3-8 per bag. It will be effective from April 1.
When contacted, ACC, the largest cement maker, refused to comment. Amrit Lal Kapur, managing director of ACC’s sister company Ambuja Cements, said, “We have not approved any hike in prices in the recent past. Though demand is good, I do not think it will continue for long.”Presently, in Mumbai, cement prices in the trade segment is Rs 262 a bag which will be raised to Rs 265 whereas in the non-trade segment, the prevailing price of Rs 250-253 a bag will rise to Rs 255-258.
Industry analysts pointed out that this price rise may not be restricted to one market. “The eastern market, which is one of the strongest consuming centre, is facing the same situation,” said a city-based manufacturer. Dealers in Kolkata confirmed that there had been a rise of Rs 5-7 a bag in the past one week.
Vinod Juneja, managing director of Binani Cement said, “There has to be an increase in prices. In North too, price rise cannot be ruled out.”
When contacted, Hari Mohan Bangur, president of Cement Manufacturers’ Association and chairman & managing director of Shree Cement, a dominant player in the North, said a decision on price would be taken after a few days.
The northern region has already seen a spate of price increases this year, which has made cement costlier by Rs 10-14 a bag.
Subscribe to:
Posts (Atom)
Posts
