Fall in gold prices not yet a concern for rupee: Nomura

NEW DELHI: Decline in gold prices is not likely to add pressureto India's current account deficit or the domestic currency, as the metal's appeal has diminished, Nomura said in a research note today. 

www.sevagiri.com

According to the global financial services firm, the recent decline in gold prices is not yet a "concern" for the Indian rupee. 

According to the Japanese brokerage firm, since 2009, lower inflation, improved RBI credibility and strong performance in financial assets have diminished gold's appeal as an investment.

Gold prices are currently hovering around Rs 25,000 per 10 grams, after it dropped to a four-year low in the domestic market. 

Moreover, the correlation between gold prices and gold demand in India had turned from "negative" to "positive" since 2009. This change in correlation was attributed to a number of factors including a "growing preference for gold as an investment asset rather than purely as a consumer good", Nomura said. 

As per the brokerage, an investment in the NIFTY index in the 12 months to end-June, would have yielded more returns than an investment in gold in rupee terms. 

"While we acknowledge a potential pick-up in seasonal demand towards the end of the year, this does not change our medium-term constructive view on INR," Nomura said. 

The rupee is hovering around Rs 63 per US dollar. 

It further noted that "coupled with a gradual economic recovery, we note that India's external vulnerability metrics continue to improve, amid signs that the RBI is being less aggressive in its $buying/INR selling intervention". 

Moreover, trade data continued to show weakness in gold demand, with import volumes dropping 21 per cent month-on-month in June by our estimates. 

This is attributed to a number of factors, chief among them the seasonal slowdown in demand during the monsoons. In addition, with rural consumers accounting for the vast majority of gold purchases, the decline in agricultural wage growth is also likely to be a factor in weakening demand, Nomura said.

Source - TOI 

Sensex down 111 pts in early trade on earnings concern

MUMBAI: The benchmark BSE Sensex declined by 111 points in early trade on Friday due to selling by funds and investors on earnings concerns amid a weak trend overseas. 

www.sevagiri.com

The 30-share barometer, which had lost 134.09 points in the previous session, fell further by 111.72 points, or 0.39 per cent, to 28,259.12 in early trade. 

Capital goods, banking, auto, power and FMCG stocks were among the major losers. 
On similar lines, the broad-based National Stock Exchange index Nifty shed 20.65 points, or 0.24 per cent, to 8,569.15. 

Brokers said disappointing quarterly earnings from some bluechip companies and a weak trend at other Asian markets dampened trading sentiment here. 

Bucking the trend, Reliance Industries was trading a shade higher at Rs 1,045.75 ahead of its financial results, to be announced later on Friday. 

Among other Asian markets, Hong Kong's Hang Seng fell by 0.92 per cent, while Japan's Nikkei moved down by 0.68 per cent in early trade. 

The US Dow Jones Industrial Average ended 0.67 per cent lower on Thursday on weak corporate earnings.

Source - TOI 

Rupee loses further, down 20 paise against dollar

MUMBAI: Falling for the third consecutive day, the rupeeweakened by another 20 paise to trade at 63.97 against thedollar in early trade on Friday on appreciation of the American currency against other major currencies globally as the US Federal Reserve prepares to hike rates. 

www.sevagiri.com

Besides, increased demand for dollar from importers and a lower opening in the domestic equity market, weighed on the local currency, forex dealers said. 

The rupee had plunged by 19 paise to close at over 3-week low of 63.77 against the US dollar in Thursday's trade on persistent demand for the American currency from banks and importers on the back of higher greenback in the overseas market. Meanwhile, the benchmark BSE Sensex was down by 111.72 points, or 0.39 per cent, to 28,259.12 in early trade Friday.

Source - TOI 

Fullerton India receives housing finance licence from NHB

Mumbai: Non-banking finance company Fullerton India on Thursday announced the receipt of housing finance licence from National Housing Bank.

www.sevagiri.com

The NBFC said it has set up a new housing finance company — Fullerton India Home Finance Company Ltd — as its fully-owned subsidiary.

Fullerton India Home Finance will largely cater to affordable housing in the lower and middle-income segments through Fullerton India’s branch network.

The new company will provide customers access to a diversified loan portfolio across loan against property, mortgage loans and home loans. The average ticket size of these loans will be in the range of Rs. 6-7 lakh.

Source : Business Line

'Housing for all' project to give Indian economy a much needed boost

MUMBAI: The Housing for All (HFA) project will give the Indian economy a much needed boost. However, its success will depend on the ramping up of the existing urban infrastructure, fast tracking of approval processes and also targeting the actual beneficiary, says India Ratings and Research (Ind-Ra).

www.sevagiri.com

The direct benefit of HFA to the economy is estimated to be Rs 15 trillion in a seven-year timeframe (FY16-FY22). "Funding of the investment of Rs 15 trillion through public-private partnerships and ramping up the supply of raw materials for construction namely steel and cement are big challenges for the execution of the HFA scheme," it said.

Municipal services such as supplying piped water, sewerage, sanitation and municipal solid waste management are also far from being equipped to take on a project of this magnitude in the next seven years.

"Apart from providing impetus to the construction sector, the scheme will increase employment opportunities and help grow the services sector. Sectors supplying crucial inputs to the construction sector, such as cement, iron and steel, will also grow. The growth of other sectors will depend on the strength of the forward and backward linkages of the construction sector with the rest of the economy," said Ind-Ra.

As the output of sectors supplying inputs to the construction sector increases, it will increase the demand for goods and services in the economy due to higher income generation. The economic impact of the scheme will also be felt at the state level. The biggest beneficiary of this will be Uttar Pradesh, followed by Maharashtra and West Bengal. These are the top three states in terms of housing shortages and increased construction activities will help these states' economies to grow.

The scheme to provide 20 million houses in three phases over FY16-FY22 has a central grant component (Rs 100,000 per slum household) going to the state government, and central assistance (Rs 150,000 other households) is likely to go directly to households. Also, the central government will provide interest subvention to households at 6.5% for loans up to a 15-year tenor through two nodal agencies - Housing and Urban Development Corporation Limited and National Housing Bank.

Source - TOI 

Axis Mutual Fund aims to mop up Rs 600 crore

MUMBAI: Axis Mutual Fund plans to mop up between Rs 500 crore and Rs 600 crore through Axis Equity Saver, a multi-asset open-ended equity fund, to be launched later during the month, a senior official said here today. 

www.sevagiri.com

The new fund offer scheduled to open on July 27 and close on August 10, will reopen on August 20. 

"We are looking to mop up Rs 500 crore to Rs 600 crore through the fund, which will invest a maximum of 45 per cent in equity and the balance in debt as well as arbitrage opportunity funds," Axis Mutual Fund Chief Executive Chandresh Nigam told reporters. 

The fund aims to generate capital appreciation and income distribution by investing in multiple asset classes which include equity, hedged equity (arbitrage opportunities) and debt. 

Later, talking to PTI, he said that his firm has lined up two products to be launched later during the year. 

"We have lined up two products, both in the hybrid fund category, to be launched during the later part of the current fiscal," he said.

Source - TOI 

Why rent agreements are only for 11 months?

Ever wondered why rental agreements are made only for 11 months? And why it is essential to have a rent agreement? Well, it is important to have a document that preserves the interest of both the parties: a tenant and a landlord. A rent agreement, thus, is the best way to take a cautious approach.

www.sevagiri.com

Understanding rent agreement

First let’s understand what a rent agreement is. “A rental agreement is a legal document that binds the owner of the property and tenant and safeguards the interest of both the parties. The landlord must either be the owner of the property or a person having attorney from the owner,” says an expert on Open House. Explaining the importance of this agreement, he adds, “It is important as it protects the rights of a landlord as well as the tenant. It prevents the unnecessary hikes and eviction without prior notice of minimum one month.”

One reason stated for 11 month agreement is to skip the registration process. “As per the Registration Act, 1908, clause (d) of sub-section (1), registration of the property that is on lease for one year or more than a year is compulsory,” informs Sony Antony, managing partner of Maxxco.

So, what is the standard duration for this? Well, as per Magicbricks legal expert, the standard rent agreement is made only for eleven months.

However, answering a query of a landlord whose tenant requires a 36 month rent agreement due to the HRA policy in his company, Augustine Joseph, another expert on the forum suggests, “ one can definitely execute the rental agreement for 36 month with some additional clauses, which include the following:

• Average increase of 5-7 per cent on an yearly basis
  

• Either party can terminate the rent agreement by giving a notice in three month advance without mentioning any reason for termination and conditions as standard.”
  

Answering the same query, another expert says, “It is not compulsory to make a rent agreement only for 11 months. Renewable/extendable agreements for three to five years can also be made and registered. However, the stamp duty and registration charges for longer duration may differ.”

Thus, in order to avoid any issues such as refusal to vacate the house when asked or disobeying the signed rules and regulation, rent agreement is a very crucial document. All you need to do is to visit the property registrar office, pay the stamp duty on the tenure of the lease and register the lease. Following these simple steps can help you getting into unwanted troubles.

Source - TOI