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29/09/2014

Indian PM Modi Could Learn From US Economic Recovery While In US

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IndusView, Monday September 29 (London): While the United States Federal Reserve Bank (Fed) is expected to raise interest rates in Spring 2015, the Reserve Bank of India (RBI) is likely to maintain them in order to battle un-simmering inflation.

The world’s largest economy registered an annualized growth of 4% in the second quarter 2014, beating expectations of 3.1% and confirming its recovery is back on track. The U.S. central bank has kept America’s short-term interest rates near zero since the end of 2008, as it battled to fuel growth after the financial crisis. A rise next year would represent the first rate increase in more than eight years; the last increase occurred in June 2006.

In India, industrial growth, which had revived in the April-June quarter and grew by 4.2%, slipped in July to a mere 0.5% for want of stimulus. The only sector that performed well was power generation with an increase by 11.2% year-on-year (y-o-y). Capital goods and durable consumer goods have underperformed, indicating weak demand. Inflation going by the wholesale price index dropped to 3.7% – its lowest in five years – but inflation at the retail level remained high at 7.8%.

“Prime Minister Modi could learn a lesson or two from the U.S. economic revival,” said Bundeep Singh Rangar, Chairman of London-based consulting firm IndusView. “India still needs to boost growth while the U.S. economy seems back on track.”

The U.S. is the only ‘superpower’ in the world today, with almost nine times India’s GDP and with a per-capita 33 times more than India’s. The U.S. is also the best example of the power of entrepreneurship enhancing prosperity of its people.

Modi will attend the United Nations General Assembly session in New York and then fly to Washington DC for the meeting with Obama at the White House on September 30. In his invitation letter, President Obama reiterated his invitation — that first came in a phone conversation with Modi on May 16 — and resolved to work closely with Modi to make India-U.S. relations “a defining partnership for the 21st Century”.

Modi, who was denied visa by the U.S. in 2005 due to the Gujarat riots, said he was of the view that “re-energizing the partnership between India and the U.S. would send an important message to the region and beyond”. Modi was Chief Minister of the State of Gujarat when violence against its minority Muslim population resulted in the deaths of 790 Muslims and 254 Hindus. 

“The U.S. and India have always been unfriendly friends. Now is the time to make themselves friendlier,” said Rangar. “From energy, to defense, to counter-terrorism, to trade, America and India have many overlapping national interests and need to strengthen their relationship to realize their efforts to collaborate.”

The U.S. Senate passed a unanimous resolution designating Sept. 30 as U.S-India Partnership Day. The resolution emphasizes the mutual benefits of a thriving U.S-India partnership, stressing the importance of increasing collaboration in order to promote stability, democracy, and economic prosperity in the 21st century.

15/09/2014

Indian Investments in London

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Indian billionaires pumped in nearly £1 billion ($1.7 billion) into buying up luxury homes in the heart of London over the last 18 months alone. 

These Indian mega-rich are expected to spend another £500 million ($850 million) on redevelopment in the next five years, says a new report from UK luxury property agents Wetherell released this week.

According to the analysis, Indian ultra high net worth (UNHW) individuals are buying up super flats, estates and hotels in London against the backdrop of a faltering real estate market back home in India.

This group of investors, second only to British-based buyers, spent almost £450 million ($760 million) purchasing 221 residences in prime central London in 2013, with the top three most popular locations being St. Johns Wood, Belgravia and Mayfair.

British buyers accounted for 30% of property in Mayfair, while wealthy Indians have snapped up 25%. Middle Eastern, continental European and Russian buyers all accounted for 13% of purchases each in the exclusive London borough.

An estimated 3,000 UHNW Indian families escape the heat of India in the summer and relocate to their homes in London – also seen as a global investment safe haven.

Despite a strengthening pound, which is eroding the currency advantage of buying in Britain, the UK capital is still perceived to be a stable investment, and has attracted funds since the global financial crisis when investors started to turn from complicated financial structures towards tangible investments.

Peter Wetherell, founder of Wetherell, said: “Many have chosen to invest in Mayfair, especially in Grosvenor Square, because they can see that currently the district is undervalued compared to neighbouring locations such as Knightsbridge and Belgravia.”

“There has been a spectacular 314% rise in sales values in Grosvenor Square since 2000, surpassing values such as Eaton Square and Cadogan Square."

Aside from private money, Indian developers are also entering the London market. The Lodha Group, one of India's largest residential developer, had recently purchased the Canadian High Commission in Grosvenor Square for £306 million ($515 million). The group plans to turn the seven floor 135,000 sq ft building into 18 to 20 luxury homes. 

Peter Wetherell, chief executive of Wetherell Estate Agents, said: 'Indian investment in luxury property in London goes back to the Edwardian era.

'This was when some of India’s richest Princes owned mansions in the capital, most notably HEH The Nizam of Hyderabad who owned Hyderabad House at No.6 Palace Green in Kensington and purchased properties for his family in Mayfair and Belgravia.

'In more recent times in 1972 Idi Amin ordered the expulsion of Uganda’s Indian business community from the country, and some 27,200 people emigrated to Britain, with the wealthiest families buying homes in Mayfair, St Johns Wood and Holland Park.'

The Flemings Hotel is owned by the Veladail Hotels Group, headed by Satinder Gulhati. The Washington Hotel on Curzon Street is understood to be owned by the Sanga family and The MayFair Hotel is believed to be owned by Jasminder Singh of the Radisson Group.

This report on foreign direct investment into London property coincides with news from UK agents Knight Frank who have today warned that the Capital needs to spend £154 billion ($260 billion) on new homes to match the expected surge in population taking it to from 8.3 million now to 9.4 million by 2022.

11/09/2014

There is No Magic-Wand Solution to India’s Problems

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IndusView Chairman Bundeep Singh Rangar on India’s Macro Trends and Why the Country Remains Favourable as a long-term Investment Destination...

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