India emerging as major investment destination for Chinese, Japanese developers

One of China’s most prominent developers, Dalian Wanda Group, signed a memorandum of understanding (MoU) earlier this year with the northern state of Haryana to develop ‘Wanda Industrial New City’.

Given the current prime minister’s focus on improving India’s stature amongst the global investment community, there has been a big change in India’s image as a business and economic hub. After 100% foreign direct investment (FDI) was allowed into the real estate industry, it was only a matter of time before foreign developers made big investment announcements.
 
One of China’s most prominent developers, Dalian Wanda Group, signed a memorandum of understanding (MoU) earlier this year with the northern state of Haryana to develop ‘Wanda Industrial New City’. The investment of US$10bn, phased out over the next decade, is a very significant outlay by any Chinese company in India.
 
Other Chinese developers are also interested in India and most likely to follow suit. A MoU signed between China Fortune Land Development Company Private Limited (CFLD) and Haryana state will see large format industrial parks come up in the state. Gezhouba, another prominent Chinese construction company, has in-principle agreed to invest INR 10,000 crore in irrigation projects in Telangana state.
 
It will be interesting to see if larger deals are signed in 2016. With China experiencing a slowdown in their own economy, the developers there will get an opportunity to benefit from India’s growth story. The Wanda investment will be one of its biggest, so far. It is also bigger than most deals that other Chinese companies investing abroad carried out in 2015.
 
Even for the Indian real estate industry, it will be among the biggest investments in the residential and retail asset classes by a foreign developer. Increased participation by foreign players is expected to help in the development of quality projects, which will benefit end-users and simultaneously create opportunities for Indian investors too.
 
It will be interesting to observe the implications of Wanda’s strategy and the innovations such foreign players bring to India as they compete with local and well-established players to capitalise on the opportunities that India gives them now.
 
Foreign developers are also going to look at partnering with their Indian counterparts. Interestingly, large residential projects are of particular interest to other Chinese developers. It remains to be seen if commercial asset class also gets on their radar in the near future.
 
The Wanda Deal
 
Wanda plans to invest USD 10 billion in the next 10 years to construct industrial townships, retail and residential developments. According to media reports, construction of the phase-I of ‘Wanda Industrial New City’ is likely to begin in 2016 and it will be spread over 1,300 hectares. It will comprise an industrial park that will house companies from various sectors, such as software, automotive manufacturing, machinery, health care, education and other industries. The first phase is anticipated to be completed in the next 3-5 years.
 
The Japanese could be next
 
Japanese and Chinese private equity investors are also looking at entering India’s real estate sector. Japanese developers are keen to explore strategic partnerships and enter into joint ventures with Indian builders, and are particularly interested in industrial projects. There is likely to be an inflow of at least USD 2 billion in investments from Japan into the Indian real estate market over the next three years.
 
Interestingly, the RICS-JLL survey this January had shown that 62% of the respondents - all seasoned real estate investors - felt that institutions from Japan and China could come knocking to the Indian real estate market in 2016.

Airtel announces Open Network initiative under Project Leap

Airtel has opened up its entire mobile network information to its customers through an interactive online interface.

Bharti Airtel, country’s largest telco, announced a new initiative ‘Open Network’ under Project Leap, its national network transformation initiative.

India’s First Open Network

In another industry first initiative, Airtel has opened up its entire mobile network information to its customers through an interactive online interface. The new interface will display Airtel’s mobile network coverage/signal strength across India in addition to network site deployment status.

Using a simple colour scheme, the interface will allow customers to check if the Airtel mobile network in an area is excellent, good, moderate or non-existent, along with the status of corresponding sites serving the area - existing, required, being upgraded or forcibly shut down. The interface uses geospatial tools and other technologies for accurate reporting of network coverage.

The new interface will also allow customers to report their network related issues in an easy fashion.

In addition, customers can also contact the Airtel Call Centre or walk into any of the Airtel Flagship Stores across the country to report their network related issues. All Airtel Call Centres and Flagship Stores have been specially equipped with solutions based on the new interface to respond to network related issues.

Gopal Vittal, MD & CEO (India and South Asia), Bharti Airtel said, “Open Network is a paradigm shift in the way we engage with our customers. With this initiative, we are establishing complete transparency with regards to our mobile network and opening ourselves to customer scrutiny and feedback. For us, the network experience is paramount and Airtel customers can now take charge of network issues and be a part of the solution, rather than waiting for it to happen. Today, getting permissions to put up a network site is perhaps the biggest challenge in delivering a seamless experience to customers. We hope customers will actively come forward and help us make our network better.”

Other initiatives under Project Leap

Airtel is also deploying a range of innovative technology solutions including small cells, indoor solutions, wi-fi hotspots and carrier aggregation technologies to improve network experience inside buildings. Over the next three years, the Company plans to deploy over 1, 00,000 such solutions.

Airtel is swapping its legacy networks and base stations with smaller, more compact and efficient technologies that will significantly improve customer experience. All these modem base stations will use a single radio access network to manage multiple spectrum bands.

The Company is creating more network capacity through acquisition of additional spectrum and deployment of fiber. Airtel plans to cumulatively deploy more than 550,000 Kms of domestic & international fiber in order to drive down latency, improve customer experience and serve the growing demand of data services for years to come.

During Financial Year ended March 2016, Airtel invested over INR 15,000 crores across India towards deployment of over 88,000 sites. This is the largest network deployment anywhere in the world outside of China.

Recently, in an industry first, Airtel announced a 25% more stringent voluntary benchmark of 1.5% for mobile call drops versus the current TRAI prescribed norm of 2% under the Quality of Service regulations.

Based on the calculation of the call drop rate during network busy hour on a monthly average, any amount calculated for exceeding the 1.5% voluntary benchmark, subject to a maximum of INR 100 crores per annum, will be contributed by Airtel towards the education of underprivileged children in rural areas.

In November 2015, Airtel commenced the implementation of its network transfo1mation program - Project Leap. With a national investment of Rs. 60,000 crores over the next three years, Airtel’s ‘Project Leap’ is a strategic company initiative aimed at perceptibly improving its network quality and delivering the best customer experience.

New campaign around Open Network

Starting tomorrow, the Company is rolling out a 360 degree advertising campaign around the Open Network initiative. The path-breaking campaign from Taproot-Dentsu takes a bold approach to communicating the initiative with a media-mix of TV, Print, Outdoor and Digital.

SBI associate banks on a roll on reports of Govt go ahead for merger with parent

Shares of 3 associate banks of SBI surged 17.9% to 20% at 10:20 IST on BSE, extending gains registered during the previous trading session triggered by media reports that the government has given its go ahead for merger of 5 associate banks with SBI

State Bank of Mysore was locked at 20% upper circuit on BSE at Rs 657.45. State Bank of Travancore was up 18.6% at Rs 568. State Bank of Bikaner and Jaipur was up 17.9% at Rs 707.20. All these three stock rose by their respective 20% maximum permissible daily level yesterday, 15 June 2016. In just two trading sessions, the stock price of State Bank of Mysore has risen 43.98%, the stock price of State Bank of Travancore has jumped 42.32% and that of State Bank of Bikaner and Jaipur has jumped 41.52%.

The stock price of parent State Bank of India (SBI) was currently up 0.5% at Rs 216.85. The stock surged 3.9% to settle at Rs 215.65 yesterday, 15 June 2016.

Meanwhile, the S&P BSE Sesnex was off 299.71 points or 1.12% at 26,426.63

On 17 May 2016, SBI had announced that it was seeking in principle sanction of the Government of India (GoI) to enter into negotiation with its 5 subsidiary banks viz. State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore to acquire their businesses including assets and liabilities. At that time SBI also said that its board of directors will take a final call after evaluating all the relevant considerations. SBI also said at that time that it was considering acquisition of the newly-created Bharatiya Mahila Bank.

SBI holds 90% stake in State Bank of Mysore, 79.09% stake in State Bank of Travancore and 75.07% stake in State Bank of Bikaner and Jaipur. State Bank of Hyderabad and State Bank of Patiala are not listed on the bourses.

Live Stock Market Updates - Sensex falls 200 points; Nifty below 8,150

The INDIA VIX is up 3.97% at 17.7325. The BSE Mid-cap Index is trading down 0.23% at 11,380, whereas BSE Small-cap Index is trading down 0.08% at 11,454.

The BSE Sensex opened 40.31 points down at 26686.0.3, while Nifty 50 index opened 25.95 points down at 8,180.65.

At 9:28 AM, the S&P BSE Sensex is trading at 26,525 down 201 points, while NSE Nifty is trading at 8,135 down 72 points.

The BSE Mid-cap Index is trading down 0.23% at 11,380, whereas BSE Small-cap Index is trading down 0.08% at 11,454.

GAIL, Lupin, M&M, Unitech, Indian Hotel and Balrampur Chini are among the gainers, whereas Maruti Suzuki, Cipla, ITC, itc, Adani Ports, Infosys, L&T, Bajaj-Auto and TCS are losing sheen on BSE.

Some buying activity is seen in realty, metal and consumer durables sectors, while banking, telecom, finance capital goods, IT, FMCG and power showing weakness on BSE.

The INDIA VIX is up 3.97% at 17.7325. Out of 1,800 stocks traded on the NSE, 880 declined, 537 advanced and 383 remained unchanged today.

A total of 48 stocks registered a fresh 52-week high in trades today, while 11 stocks touched a new 52-week low on the NSE.

The Indian rupee opened marginally higher by three paise at 66.12/$ against US Dollar on Thursday as against the previous close of 66.15/$.

Asian markets  are trading on a mixed note. Nikkei 225 and Shanghai Composite trading lower by 1%. Hang Seng dropped 2%. Bank of Japan has left deposit rates unchanged at -0.1%.

Wall Street fell for the fifth straight session after the Federal Reserve left US interest rates unchanged. The Dow Jones fell 30.13 points, or 0.17 per cent, while the S&P 500 lost 3.53 points, or 0.17 per cent and the Nasdaq Composite dropped 8.62 points, or 0.18 per cent.

The Fed kept interest rates unchanged and signalled it still planned two hikes this year. In its post-meeting statement, the Fed noted that the unemployment rate had declined (to 4.7%) but “job gains have diminished”.

The Bank of Japan kept monetary policy steady and stuck to its optimistic view of the economy on Thursday, even as renewed yen rises and slumping stock prices threaten to hurt business sentiment and derail a fragile economic recovery.

Union Cabinet replaced the 5/20 rule with the new 0/20 rule which will allow domestic airlines to operate flights to SAARC countries and countries with territory located entirely beyond a 5000 km radius from New Delhi.

Cabinet Committee on Economic Affairs, chaired by the Narendra Modi has given its approval for disinvestment of 10% paid up equity of Housing and Urban Development Corporation (HUDCO) out of Government of India's shareholding of 100% through IPO in the domestic market as per the SEBI Rules and Regulation.

Arun Jaitley to brief media after the inaugural session of the two-day 'Annual conference of Tax Administrators 2016'in New Delhi.

Fed leaves interest rates unchanged

"Recent economic indicators have been mixed, suggesting that our cautious approach to adjusting monetary policy remains appropriate," Fed Chair Janet Yellen stated.

The Federal Reserve left its benchmark interest rate unchanged on Wednesday.

"Recent economic indicators have been mixed, suggesting that our cautious approach to adjusting monetary policy remains appropriate," Fed Chair Janet Yellen stated.

The Federal Open Market Committee met in April indicates that the pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up. Although the unemployment rate has declined, job gains have diminished. Growth in household spending has strengthened. 

Since the beginning of the year, the housing sector has continued to improve and the drag from net exports appears to have lessened, but business fixed investment has been soft. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will strengthen. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. 

This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Crompton Greaves plans to sell automation arm; up 1%

The company appointed bankers to sell the business, which reported sales of Rs 754 crore (euro 100 million) 2015-16.

Crompton Greaves is planning to sell its global automation business, ZIV, at a valuation of $112 million (Rs 754 crore) by September, according to reports.

Report says that the company appointed bankers to sell the business, which reported sales of Rs 754 crore (euro 100 million) 2015-16.

Crompton Greaves Ltd ended at Rs. 75.45, up by Rs. 1 or 1.34% from its previous closing of Rs. 74.45 on the BSE.

The scrip opened at Rs. 0 and touched a high and low of Rs. 0 and Rs. 0 respectively. A total of 13304216(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 4666.13 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 76.15 on 03-Jun-2016 and a 52 week low of Rs. 38.79 on 12-Feb-2016. Last one week high and low of the scrip stood at Rs. 75.2 and Rs. 68.7 respectively.

The promoters holding in the company stood at 34.37 % while Institutions and Non-Institutions held 46.04 % and 19.42 % respectively.

The stock traded above its 50 DMA.

Top 18 stocks in focus today: SBI, Tata Power, Crompton Greaves

Check out the companies which will be in focus during trade today based on recent and latest news developments.

SBI:  Union Cabinet on Wednesday approved the merger of five associate banks — State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad as well as Bharatiya Mahila Bank with State Bank of India.

Crompton Greaves: Crompton Greaves is planning to sell its global automation business, ZIV, at a valuation of $112 million (Rs.754 crore) by September, according to reports.

NTPC, Coal India: NTPC Ltd has announced that pursuant to Joint Venture Agreement dated May 16, 2016 signed with Coal India Limited, a Joint Venture Company in the name of "Hindustan Urvarak & Rasayn Limited", with 50:50 shareholding by NTPC & Coal India has been incorporated on June 15, 2016.

BPCL, HPCL, IOC: Petrol price was hiked by a marginal 5 paise per litre, while diesel rate was increased by Rs.1.26 per litre.

Tata Power: Tata Power Renewable Energy Limited has issued and allotted Guaranteed, Unsecured, Non-Cumulative, Redeemable, Taxable, Listed, Rated Non-Convertible Debentures of Rs. 575 crores.

IL&FS Transportation Networks: IL&FS Transportation Networks announced that MAIF Investments India Pte. Ltd. has remitted the consideration of Rs.109,78,68,850/- towards sale of 83,13,800 Equity shares of Rs. 10 each by the Company in GRICL representing 15% of paid up equity capital of GRICL.

GlaxoSmithkline Consumer Healthcare: GlaxoSmithkline Consumer Healthcare has commenced the operations at its Nabha, Patiala unit after nearly a month.

Spice Mobility: The board of directors of the company has approved the proposal for acquisition of 49% stake by “Digitone” in Spice Online.

Vedanta: The company said its shareholders have approved the proposal to raise its limit of inter-corporate loans to Rs.800 billion.

Indiabulls Housing Finance: The company said it plans to raise Rs.200 crore by issuing non-convertible debentures.

HDIL: Promoter of HDIL will infuse up to Rs.1.50 billion fresh capital in the company. The capital will be infused through a preferential issue of share warrants to promoter Sarang Wadhawan.

Tata Sponge Iron: The company said it has won the bid for delivery of 24,000 tonnes of coal from state-run miner Coal India.

Andrew Yule: The company has consider the Allotment of 1,24,62,500 Equity Shares of Rs. 2/- each of the Company in favour of Bank of Baroda, against conversion of Working Capital Term Loan availed of by the Company, as approved by the Cabinet Committee on Economic Affairs.

Persistent Systems: Persistent Systems said it has the strongest overall capabilities for Distributed Agile Delivery of services, according to the just-released report Ovum Decision Matrix: Distributed Agile Delivery Models 2016-2017.

NMDC: The company has reported 4.99 million tonnes of iron ore production and logged sales volume of 4.98 MT up to May 2016.

International Paper: The company said in a notice to exchanges that its promoters to sell 20% stake to parent for restructuring.

Info Edge (India): The company has invested an amount of Rs.30 million through convertible preference shares for acquiring 11.5% stake, on fully converted & diluted basis, in a company known as Vcare Technologies Pvt Ltd.

Zydus Cadila: Zydus Cadila, a global healthcare provider and Eczac1ba1ilac; Pazarlama A.$. a leading healthcare company of Turkey have signed a strategic collaboration agreement to market biotech products in the Turkish market.

Zensar Technologies: Zensar Technologies announced a multi-million multi-year Managed Services Deal with John Lewis, UK's largest department store retailer. Zensar has been partnering John Lewis through its business transformation process with next gen applications management solutions for many years now.

Alstom T & D India: The company received orders from Power Grid worth Rs.2020 million.

UPL: The company has acquired 26% stake in Weather Risk Management Services Pvt Ltd for Rs.100 million. 

NTPC, Coal India incorporate JV to revive Fertilizer Corporation plants

The Joint Venture Company shall take up revival of Gorakhpur and Sindri plants of Fertilizer Corporation of India Ltd. by setting up ammonia urea plants at each locations.

WIth reference to the earlier letter dated May 16, 2016, NTPC Ltd has announced that pursuant to Joint Venture Agreement dated May 16, 2016 signed with Coal India Limited, a Joint Venture Company in the name of "Hindustan Urvarak & Rasayn Limited", with 50:50 shareholding by NTPC & Coal India has been incorporated on June 15, 2016.

The Joint Venture Company shall take up revival of Gorakhpur and Sindri plants of Fertilizer Corporation of India Ltd. by setting up ammonia urea plants at each locations.

NTPC Ltd ended at Rs. 153.95, up by Rs. 5.75 or 3.88% from its previous closing of Rs. 148.2 on the BSE.

The scrip opened at Rs. 149 and touched a high and low of Rs. 154.9 and Rs. 148.65 respectively. A total of 4141405(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 126938.86 crore.

The BSE group 'A' stock of face value Rs. 10 touched a 52 week high of Rs. 154.9 on 15-Jun-2016 and a 52 week low of Rs. 107.2 on 25-Aug-2015. Last one week high and low of the scrip stood at Rs. 154.9 and Rs. 147.15 respectively.

The promoters holding in the company stood at 69.96 % while Institutions and Non-Institutions held 27.76 % and 2.29 % respectively.

The stock traded above its 50 DMA.

Bank of Japan keeps monetary base target unchanged

The Bank decided, by a 7-2 majority vote, to continue applying a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.

At the Monetary Policy Meeting (MPM) held today, the Policy Board of the Bank of Japan decided upon the following.

(1)Quantity Dimension: The guideline for money market operations

The Bank decided, by an 8-1 majority vote, to set the following guideline for money market operations for the intermeeting period

The Bank of Japan will conduct money market operations so that the monetary base will increase at an annual pace of about 80 trillion yen.

(2) Quality Dimension: The guidelines for asset purchases

With regard to the asset purchases, the Bank decided, by an 8-1 majority vote, to set the following guidelines

a) The Bank will purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 80 trillion yen. With a view to encouraging a decline in interest rates across the entire yield curve, the Bank will conduct purchases in a flexible manner in accordance with financial market conditions. The average remaining maturity of the Bank's JGB purchases will be about 7-12 years.
b) The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 3.3 trillion yen 1  and about 90 billion yen, respectively.
c) As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.

Of about 3.3 trillion yen, 300 billion yen is used in line with the implementation of a program for purchasing ETFs composed of stocks issued by firms that are proactively investing in physical and human capital, as decided at the MPM held in December 2015.

(3) Interest-Rate Dimension: The policy rate

The Bank decided, by a 7-2 majority vote, to continue applying a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.

Japan's economy has continued its moderate recovery trend, although exports and production have been sluggish due mainly to the effects of the slowdown in emerging economies. Overseas economies have continued to grow at a moderate pace, but the pace of growth has somewhat decelerated mainly in emerging economies. In this situation, the pick-up in exports has paused. On the domestic demand side, business fixed investment has been on a moderate increasing trend as corporate profits have been at high levels. Against the background of steady improvement in the employment and income situation, private consumption has been resilient, although relatively weak developments have been seen in some indicators. Housing investment has resumed its pick-up, and the pace of decline in public  investment has been slowing. Reflecting these developments in demand both at home and abroad and the effects of the Kumamoto Earthquake, industrial production has continued to be more or less flat. Financial conditions are highly accommodative. On the price front, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is about 0 percent. Although inflation expectations appear to be rising on the whole from a somewhat longer-term perspective, they have recently weakened.

With regard to the outlook, although sluggishness is expected to remain in exports and production for the time being, domestic demand is likely to follow an uptrend, with a virtuous cycle from income to spending being maintained in both the household and corporate sectors, and exports are expected to increase moderately on the back of emerging economies moving out of their deceleration phase. Thus, Japan's economy is likely to be on a moderate expanding trend. The year-on-year rate of change in the CPI is likely to be slightly negative or about 0 percent for the time being, due to the effects of the decline in energy prices, and, as the underlying trend in inflation steadily rises, accelerate toward 2 percent.

Risks to the outlook include uncertainties surrounding emerging and commodity-exporting economies, particularly China, developments in the U.S. economy and the influences of its monetary policy response to them on the global financial markets, prospects regarding the European debt problem and the momentum  of economic activity and prices in Europe, and geopolitical risks. Against this backdrop, global financial markets have remained volatile. Therefore, due attention still needs to be paid to the risk that an improvement in the business
confidence of Japanese  firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation might be negatively affected.

The Bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine risks to economic activity  and  prices,  and  take  additional  easing  measures  in  terms  of three  dimensions  -­ quantity,  quality,  and the  interest  rate  -- if it  is judged  necessary  for achieving the price stability target.