Revision in SMALL SAVINGS RATES from Jan. 1, 2018

 Post office Small savings interest rates cuts by 0.20%

The government slashed interest rates on small savings schemes, including NSC and PPF, by 0.2% for the 2018 January-March period from the rates applicable in the previous quarter, a move that will prompt banks to lower deposit rates.

However, the interest rate in the 5 -year Senior Citizens Savings Scheme has been retained at 8.3%. The interest on the scheme is paid quarterly.

A Finance Ministry notification said rates have been reduced across the board for schemes such as National Savings Certificate, Sukanya Samriddhi Account, Kisan Vikas Patra and Public Provident Fund (PPF). However, the interest on savings deposits has been retained at 4% annually.


As per the notification, PPF and NSC will fetch a lower annual rate of 7.6% while KVP will yield 7.3% and mature in 11 months. The girl child savings scheme, Sukanya Samriddhi Account, will offer 8.1 % against the existing 8.3% cent annually. Term deposits of 1 to 5 years will fetch a lower interest rate of 6.6 to 7.4%, to be paid quarterly, while the 5 year recurring deposit is pegged at 6.9%.

“On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis,” the ministry said, while notifying the rates for fourth quarter of financial year 2017-18.

Term deposits of 1 to 5 years will fetch a lower interest rate of 6.6 to 7.4%, to be paid quarterly, while the five-year recurring deposit is pegged at 6.9 per cent. “On the basis of the decision of the government, interest rates for small savings schemes are to be notified on a quarterly basis,” the ministry said, while notifying the rates for fourth quarter of financial year 2017-18.

While announcing the quarterly setting of interest rates, the ministry had said that rates of small savings schemes would be linked to government bond yields. The move is expected to see banks lowering their deposit rates in line with the small savings rate offered by the government.

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Knight Frank’s 2017 round-up and 2018 outlook : Outlook on 10 markets across Asia Pacific.

 Outlook on 10 markets across Asia Pacific.

Knight Frank’s 2017 round-up and 2018 outlook

2018 sees increasing demand in co-working space;
rising interest rates a concern for residential investors


 Knight Frank, the independent global property consultancy, releases its 2017 round-up and 2018 outlook on 10 markets across Asia Pacific.

ASIA-PACIFIC Nicholas Holt, Head of Research, Knight Frank Asia-Pacific

Residential: 2017 has been a relatively calm year for mainstream residential markets in the Asia Pacific region, with some of the strongest performers of last year seeing price growth moderate. China and Australia, most notably, have seen sentiment soften, due to measures including restrictions on mortgage lending, significant new supply, and in the case of China stricter home purchase restrictions. Similarly, India continued to suffer from the fallout from demonetisation and the introduction of the Goods and Services Tax (GST), with the market spending much of the year re-finding its feet.
One of the key themes in the major cities in the region continues to be affordability – and we are seeing both policy and market reactions to this issue. On the policy side, we have seen significant house building programmes in a number of markets, restrictions on foreign buyers introduced in New Zealand; while developers in a number of major cities across the region have responded by trending to developing smaller units.

The outlook for 2018 is positive but muted, with interest rate rises and a low probability of the lifting of restrictions likely to keep a lid on price growth in many markets. There will, however, be pockets of stronger sentiment across the region: Singapore is set for a stronger 2018 driven by the buoyant collective sales market; Manila continues to see strength in demand for condominiums; while the Indian residential market could start to emerge from its slumber as it absorbs the policy, regulatory and tax changes of the last 16 months.

Commercial: Commercial occupier markets were buoyed in 2017 by higher than expected economic growth in the Asia Pacific region. Office and logistics markets were especially strong in terms of activity, the former seeing growth in demand from co-working space and technology related companies, and the latter a spill over in demand from online retailing. Traditional retailing formats continued to be challenged in many markets due to the growth of e-commerce, with secondary retail especially under pressure to re-position in order to cater to new market realities.

On the investment side of the equation, the capital controls more stringently applied to outbound real estate investment from China have put a brake on the investments deals in key global gateway cities, while the gathering momentum around the Belt and Road Initiative has opened up another key investment avenue for markets in Southeast Asia, Eastern Europe and the Middle East. Otherwise, total regional investment volumes* in 2017 look to be up on 2016, with transactions recorded in the first three quarters of 2017 hitting USD 540 billion, up 31% on the same period of 2016. South Korea, Singapore and Hong Kong were especially active, with South Korea notably gaining more international attention on the back of attractive yields and solid occupier activity.

Looking forward to 2018, many eyes will be on Chinese policy makers, as to whether the restrictions on outbound investment are eased. Another interesting milestone will be the introduction of the first

REIT in India and the potential this has of bringing more transparency and liquidity to the sector in 2018 and beyond.

With a significant weight of money still looking at real estate, we expect capital from a number of geographies and sources, including sovereign wealth funds and privates, to continue to be actively sourcing deals in 2018. Logistics assets along with office markets with sound fundamentals and strong drivers of growth, are both likely to see increased demand over the next 12 months – with China, Australia and Singapore most notably likely to attract significant attention.

* Source: Real Capital Analytics covering Asia Pacific markets

INDIA Dr Samantak Das, Chief Economist & National Research Director, Knight Frank India

Residential: Affordable housing has been the trend that became a reality in 2017. While the government started with a slew of incentives in the segment, developers jumped on to the bandwagon with appropriate supply of projects. In 2018, government incentive-backed affordable housing trend will continue to flourish in the peripheral markets. However, smaller ticket size (house value) units made possible by reducing the unit area (apartment configuration) of residential units will redefine affordability even in city areas where prices are considered high.

Commercial: Co-working space is witnessing increasing momentum as seen in not just the volumes of space taken up but also the diversity of players that are now queuing up to serve occupiers in this quality starved office space market. In 2018, shrinking availability of quality leased office assets coupled with yields reaching historic lows will push investors to look at alternative segments like retail and warehousing. On the other hand, signing built to suit deals will become imminent for office occupiers.

AUSTRALIA Michelle Ciesielski, Director of Research, Australia

Residential: Despite residential price growth cooling across the mainstream markets along the Australian East Coast, the prime residential market has continued to attract the wealthy population in 2017. Latest data on high net worth individual migration has followed a similar trend, confirming the strong and growing desire to live in Australia, with demand for prime property outweighing the limited supply being bought to market in both the established and new supply markets.
With recent changes to legislation in New South Wales, it’s likely 2018 will record a further increase in the number of collective strata site sales encouraging the upgrade of buildings not currently reaching their full potential. This reform provides owners of freehold strata lots with an alternative way to end their scheme by allowing for the collective sale, or redevelopment, of their strata complex in circumstances where at least 75% of owners agree. With this reform, there are many potential development sites that could be unlocked across Greater Sydney.

Commercial: The trend towards co-working spaces continued to gain traction in 2017. Knight Frank Research has reported the total number of co-working spaces stood at 309 in August 2017, growing 297% between 2013 and 2017. This industry occupies 193,190 square metres across six capital cities, equivalent to 0.6% of total office stock where Melbourne accounts for nearly 50%, followed by Sydney with 38% of the total. Tenants in the Technology, Advertising, Media and Information (TAMI) space

and Small and Medium Enterprises (SMEs) will continue to drive demand growth in 2018. The challenge will be availability in the CBD with net supply of office space in Sydney and Melbourne extremely low over the next two years, expected to drive down vacancy and push up both prime and secondary face rents.

CAMBODIA Ross Wheble, Country Manager, Knight Frank Cambodia

Residential: There was a move away this year from developers launching high-end condominium projects targeted at foreign investors to launching more affordable units targeting the domestic market, which is needed for the long-term sustainability of the sector. With the number of condominiums scheduled for completion in 2018, there is likely to be downwards pressure on rental prices which, whilst lowering rental returns for investors, will also make Phnom Penh more competitive in terms of the cost of living, which is comparatively high with its regional neighbours.

Commercial: The retail sector remains the most dynamic in Cambodia and several new retail formats were introduced into the market in 2017, including container markets. With such a low median population age, the success of these new retail formats underpins the changing face of Cambodia’s retail sector and consumer spending habits. I believe we will continue to see an increasing number of MOUs announced between international hotel operators and local developers as the tourism sector in Cambodia continues to mature. Historically perceived as a backpacker destination, Cambodia is finally moving up the value chain in terms of attracting high-spending tourist which will have knock-on effects across all sectors.

GREATER CHINA

HONG KONG
David Ji, Head of Research, Knight Frank Greater China

Residential: Hong Kong’s luxury residential ranks second in the world after Monaco. It has been a major market for Chinese mainland capital venturing overseas this year despite heavy taxation. In 2018, Hong Kong will see at least three or four US interest hikes that will eventually impact local mortgage interest levels and market demand.

Commercial: Hong Kong has topped Knight Frank’s Skyscraper Index for the past five years even though there is no indication that demand is relenting. In 2018, co-working space will take larger share of the Hong Kong office market as tech and small to medium ecommerce firms expand their business.

CHINESE MAINLAND  David Ji, Head of Research, Knight Frank Greater China

Residential: Chinese Mainland’s cooling measures are taking effect with house price growth slowing or reducing in major cities and inventory level receding.

After the 19th Party Congress, house purchase restrictions will spread to an even wider range of cities. In the meantime, we will see more efforts to be put in developing the rental housing market.

Commercial: Authorities imposed strict control on outflow of capital and outbound real estate investment this year, which had a major impact on some of the gateway markets around the world.

Domestically, two trends will continue: large retailers embracing online platforms, and ecommerce marching into physical retail.
TAIWAN Andy Huang, Associate Director for Research, REPro Knight Frank
Residential: Taiwan’s home price shows signs of stabilisation this year, but the number of deals constitutes only 50 percent of the level in 2011 prior to the introduction of luxury tax. In 2018, record low mortgage rate and deregulation of LTV will make the market rebound gradually.
Commercial: Taiwan authorities continue to apply capital control and new taxes on investment of insurance companies and foreigners. Investors stay on the sidelines and self-use demand underpins the market. New supply of Taipei’s office market is expected to lift rental levels 3% to 5% for prime offices and the land market will perform well.
INDONESIA Hasan Pamudji, Senior Associate Director Professional Consultancy, Knight Frank Indonesia

Residential: With the ongoing efforts to improve public transportation networks, including the rapid light transit rail line (LRT) and the mass rapid transit project (MRT), we now foresee a growth trend that is primarily based on mixed-use developments, many of them new, built along transportation lines. New urban development will increasingly follow public transport lines. More and more integration among residential townships in the fringe of Jakarta will be in trend connecting with the upcoming public transportation networks such as high-speed trains, light-rail trains and toll roads.

Commercial: The growth of co-working spaces for commercial office because of technology and internet developments. Logistics spaces for warehouses as internet on-line businesses have been growing rapidly. We will see those new sectors being developed and affecting the market trend at a steady pace.

MALAYSIA Judy Ong, Executive Director Research & Consultancy, Knight Frank Malaysia

Residential: Housing affordability remains a key issue in Malaysia, particularly in the capital and key cities. House prices which have been trending up since 2010 continue to outpace the rise in income levels and with that, the prevailing median house prices are beyond the reach of most Malaysians. Coupled with the slew of cooling measures implemented progressively since 2012 to curb excessive speculation in the property market, sales volume has continued to decline. To address weaker sales number and falling revenue, many developers have turned their focus to the affordable housing segment, while under Budget 2018, the government has increased allocation to address rising cost of living and affordable housing issues among the lower to middle income segments of the population.
In 2018, the recent freeze on four components of the property market that include condominiums and serviced apartments priced RM1 million and above is expected to provide a breather to the challenging luxury residential sector.

Developers are expected to take stock of the situation by reviewing and re-planning their proposed products and may further defer property launches. We expect to see more bite-size units which translate to lower quantum pricing (< RM1 million) coming into the market although moving forward, there may be risk of oversupply in this category of units.

Commercial: Completion of the Sungai Buloh–Kajang [SBK] mass rapid transit line (MRT Line 1), with full operations (for both Phases 1 and 2) since 17 July 2017. Together with the existing LRT and KTM lines improving connectivity within the Greater Klang Valley region, we continue to see positive demand for office space in established and upcoming decentralised locations along the rail transportation routes. The development and infrastructure progression at the upcoming international financial district of Tun Razak Exchange (TRX) is expected to revive demand for office space in the KL city. The TRX MRT station is one of the two interchanges between the SBK and the upcoming MRT Line 2 (Sungai Buloh–Serdang–Putrajaya [SSP] line). Kuala Lumpur offers opportunities that parallel other western and regional markets, supported by improving pool of premium and good grade office space and transport infrastructure, a multi-lingual educated workforce and competitive cost of doing business amongst others.
With changes in technology supporting flexible working culture, the serviced office and co-working

segments are gaining popularity. With strong government-led initiatives by MDec, leading to the launch of Malaysia Digital Hub and the Malaysia Tech Entrepreneur Programme (MTEP), demand for serviced office and co-working space is expected to grow across a diverse mix of industries and professions such as technology start-ups and SMEs. Greater Klang Valley continues to see the expansion of global as well as the emergence of local co-working operators.

SINGAPORE Alice Tan, Head of Consultancy & Research, Knight Frank Singapore

Residential: The collective sales fever has gained rapid traction in Singapore since May 2017, with a total of 25 collective sale deals achieving a total of over S$7.9 billion in sales value. The property developers’ hunger to replenish their land bank amid the record low unsold inventory this year of below 17,500 units for the past two quarters, has further contributed to the wave of investment sales at higher than expected prices. The prospect of a continuing price recovery of private residential properties in Singapore, fueled by high land bid prices, could gradually erase the past price decline of 11 per cent over four years that the government has tried to achieve. We foresee that the price increase of private homes could range between 3% to 7%, year-on-year by Q4 2018.

Commercial: The office market saw an injection of renewed confidence with the sale of Asia Square Tower 2 for S$2.094 billion to CapitaLand, yet another big-ticket deal and a reflection of certainty in the prospects for office property.

As the nature of office space needs evolves rapidly with new ways of business operations and engagement, we foresee the demand for flexible, activity-based working (ABW) spaces to gather pace for the office property market in 2018. ABW is expected to be a predominant workplace strategy going forward, adopted not only by the technology sector, but by all organisations looking to foster knowledge sharing, collaboration, staff well-being and productivity in a flexible and inspiring workplace environment.
Plans for rejuvenating existing precincts that matter to Singapore’s image and future could be on the cards in 2018 as the Singapore government continues designing the country’s map of transformation.

THAILAND

Lalita Siriboon, Valuation and Advisory Manager, Knight Frank Thailand

Residential: Significant growth in the number of domestic developers and foreign investors/developers partnerships boosted demand from abroad. In 2017, the market witnessed more Asian investors purchasing condominiums for capital gain and rental investments. Mainland Chinese buyers have increased considerably in the last few years. This could continue as property market restrictions in China may prompt more mainland Chinese buyers to turn their attention overseas.

The extension of mass transit routes will continue to play a big role in supporting urbanisation throughout Bangkok, especially those within the radius of BTS Light Green Line Extension (Mo Chit – Kukot and Bearing – Samrong), MRT Blue Line Extension (Charansanitwong – Petchkasem), MRT Orange Line (Rama 9 – Ramkamhaeng), and SRT Dark Red Line (Bang Sue – Rangsit).

Commercial: Growth in community mall supply in Bangkok has seen a marked slowdown since the failures of several community malls have discouraged new development. According to our commercial team, community mall occupancy rates continuously drop, resulting from vacating tenants. To draw more traffic and boost revenue, developers will continue to focus more on mixed-use development where commercial space is considered as a core component.


For further information, please contact:

Aanchal Shetty, AVP – PR & Corporate Communications
aanchal.shetty@in.knightfrank.com +91 9930542661


Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 15,000 people operating from 418 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.


In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management. For more information, visit www.knightfrank.in.
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JOURNEY OF SENSEX from 100 to 34000

JOURNEY OF SENSEX from 100 to 34000

The Sensex, has been in existence since 1875, is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on BSE.
Published since 1 January 1986, Sensex is regarded as the pulse of the domestic stock markets in India. The base value of the Sensex is taken as 100 on 1 April 1979, 

Here is a timeline on the rise of the Sensex:

100 1 APRIL, 1979
1000 July 25, 1990
2000 January 15, 1992
3000 February 29, 1992
4000 March 30, 1992
5000 October 11, 1999
6000 February 11, 2000
7000 June 21, 2005
8000 September 8, 2005
9000 December 5, 2005
10000 February 7, 2006
11000 March 27, 2006
12000 April 20, 2006
13000 October 30, 2006
14000 December 5, 2006
15000 July 6, 2007 
16000 September 19, 2007
17000 September 26, 2007
18000 October 9, 2007
19000 October 15, 2007 
20000 December 11, 2007 
21000 November 5, 2010
22000 March 24, 2014
23000 May 9, 2014
24000 May 13, 2014 
25000 May 16, 2014 
26000 July 7, 2014 
27000 September 2, 2014
28000 Nov 12, 2014
29000 JAN 15, 2015
30000 MARCH 04, 2015
31000 MAY 27, 2017
32000 JULY 13,u  2017
33000 OCT 25, 2017
34000 Dec 26, 2017.            


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Is 2018 May Bring the Big Residential Revival?

2018 May Not Bring the Big Residential Revival


by Anuj Puri, Chairman – ANAROCK Property Consultants

The year 2017 will be remembered as the year of disruption and radical policy reforms in the history of Indian real estate. While RERA and GST might be considered as a disruption by the industry, the government’s sustained efforts towards promoting affordable housing provided some hope to the beleaguered residential sector.  However, the year 2017 was another watershed year for the residential sector wherein neither new launches nor sales could not ignite the hope of revival.

As 2017 comes to end, developers are hoping that the year 2018 will bring in the much-anticipated revival of the residential sector. However, the year 2018 is expected to be no different than 2017 because of the following notable trends:

  • Weak consumer sentiment will limit the revival - The weak job market, and slow GDP growth rate has negatively impacted consumer sentiment and they might continue with their stance of being extra cautious and conservative while making long-term financial commitments.
  • Developers will be under stress - Developers will continue to be under tremendous pressure for completing the projects as the consumer activism will increase and cases delayed possession will be taken up seriously by RERA.   
  • A possibly lacklustre budget for real estate sector - Budget for 2018-19 is expected to framed keeping in 2019 elections in mind. It is expected that the budget will be largely populistic in nature focusing more on rural economy wherein farm loan waivers and increase in minimum support price for various agricultural produce will be announced. These measures will put pressure on the fiscal position of the government, and hence any rebate for the residential sector in the form of reduction of GST rates or increase in the tax exemption limit for home loans may not happen.  
  • Hardening of interest rates - Inflation rate has been gradually inching up and the resurgent crude oil prices might further keep it at an elevated level. Also, the 10 years bond yield has been gradually inching up. The fiscal deficit is also an area of concern for RBI. In this backdrop, we might start to see a hardening of interest rates from the second half of 2018.  
  • Restricted new launches - In 2017, developers restricted the new launches and focused on completing the projects. This trend will continue in 2018 as well, as the regulatory pressure will further increase. Also, the supply of ready-to-move-in properties might increase in 2018 because of developers’ sustained focus on completing their existing projects.




Arun Chitnis
Public Relations
ANAROCK Property Consultants Pvt. Ltd.
(Formerly Jones Lang LaSalle Residential Pvt. Ltd.)

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What will be your Biggest Investment in 2018?

What will be your Biggest Investment in 2018?


 by Mr. Ramesh Nair, JLL India

2017 saw a paradigm shift in how India invests its money. While still reeling under the impact of demonetization, the year saw an introduction of major policy changes as well as the boom of newer and riskier investment avenues, including Bitcoin and other crypto- currencies.

Coming to real estate, 2017 was a roller coaster ride, with policy changes leading to speculations regarding the investment scenario. 

However, with global real estate investment activity broadly tracking last year’s pace, we saw India’s investment market attract over USD 5.1 Bn investment flows in 2017. Investor confidence was amplified on account of policy reforms including, RERA, GST, Benami Transactions Bill, demonetisation, leading the way towards a cleaner sector environment.

Amongst all sectors, the IT and commercial sector has seen maximum private equity Inflows in 2017, which amount to approximately 40% of the total investment flows, which is a 10% increase over last year.

PE Investments in residential and townships have slipped down to 35% of total investments in 2017 as compared to 59% last year, primarily on account of policy changes introduced toward the end of 2016. 

However, a substantial amount is still being invested in the residential sector majorly in the form of debt structures.

An interesting observation is that the warehousing and infrastructure asset class that had received negligible traction till 2016 suddenly saw a boost investments amounting upto 9% of total investments in 2017.

Commercial Markets

Total investments volumes in the office asset class are clearly on an improving trend with equity participation continuing to be the preferred mode for investment by PE players.

Private equity inflows in Office & IT for 2014-2017 YTD are 150% higher than the previous seven years' inflows combined signalling increased demand. 

Vacancy in major commercial corridors across prime office city markets are currently in single digits. Ongoing space requirements point towards healthy demand in the future. Hence, development of commercial projects remains attractive.

Retail

Private equity (PE) players are back investing in retail real estate through investments in superior retail malls across cities largely due to the limited supply of retail space across the country. INR 10,000 crore has been invested over last 3 years which has 93% share of pure equity.

Surprisingly, over 58% of total investments in the Indian Retail Mall universe have been in Tier II cities, signalling at the growth potential of rising consumption is resulting in such investments.

PE investments include platform and entity-level deals as well as acquisition of stakes in leading malls. 

Prime examples being -Blackstone which has set up a subsidiary - Nexus Malls for managing its retail investments across Tier I as well as smaller cities as well as the CPPIB-Phoenix Mills partnership and the Xander-APG platform.

Hospitality

Hotel buyers in the market today are strategic investors, who firmly believe that the boom in the hotel economic cycle is resuming, making it ideal to acquire operating hotels. 

New hotel supply in the country is anticipated to slow to 3-4% (y-o-y) over the next 2-3 years - from a high of 6-8% over the past five years and the opportunity to invest in the sector is ripe.

Nearly USD 500 million worth of hotel assets are presently in discussion with a total valuation of close to USD 300 million under our fold as per current mandates, amounting to 11 hotels with about 1,800 rooms. 

Investments by strategic investors in single assets will be the norm due to lack of large size portfolios. Financial investors can also look at acquiring single assets to form a portfolio.

In conclusion

The Indian real estate industry is reaping the benefits of a reform-driven environment. The new regulatory environment will demand greater accountability from developers and only those who adapt and change shall be able to sustain their business while also improving their chances for attracting institutional investments. 

We expect the new reforms to improve investor confidence and prepare the template for a more organised and transparent sector leading to it finding it's footing as the most favoured investment destination.

About the author..


Mr. Ramesh Nair, CEO & Country Head, JLL India




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Ready to move in apartments atTVS Emerald, near Tambaram.

Ready to move in apartments atTVS Emerald, 
near Tambaram, Chennai

2 BHK starting Rs.  25.2* Lac.
 
For details call 9873001420
or 

*T & C apply
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Chennai near Thirumazhisai & Oragadam On Road DTCP approved Plots

Chennai near Thirumazhisai & Oragadam On Road DTCP approved Rs. 13 Lakh Onwards Villas & Plots

Near Diamler & Benz Marine & Prathyusha Eng College 

0% EMI loan & Bank Loan 

Fore more 81225 34555
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UTI Dynamic Bond Fund - All Weather Fund..!

UTI Dynamic Bond Fund - 
All Weather Fund..!

UTI Dynamic Bond Fund is an all weather fund that has the flexibility to counter a dynamic environment by actively managing the portfolio in line with the evolving interest rate scenario. The fund is being managed dynamically with active and more frequent duration calls in order to generate alpha in line with the evolving interest rate scenario. It has the ability to reduce maturity when interest rates are rising, thereby preserving capital and can generate the attractive returns of an Income Fund when interest rates are declining.

Mr. Amandeep Chopra, Head of Fixed Income, UTI AMC said, “RBI in its recent monetary policy maintained the status quo on repo rate as was widely expected. RBI marginally raised its inflation estimate while retaining its GVA growth projections. We believe growth numbers are likely to improve hereon. However, inflation is likely to inch up going ahead due to uptick in crude oil prices, impact of HRA and core inflation inching up.  With the inflation trajectory headed northwards we believe there remains limited scope for further easing. In such a scenario, funds having the ability and flexibility to tap opportunities across the yield curve, like UTI Dynamic Bond Fund would benefit the investors.”

This fund can form part of an investor’s strategic debt allocation to build a balanced portfolio. The fund has outperformed the benchmark, CRISIL Composite Bond Fund Index across time horizons. 

The fund has generated a return of 9.84 against benchmark returns of 8.55% since inception (as October 31, 2017)


 




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COLLECTIVE EFFORTS IN MAKING TAMILNADU AS AN EXPORT HUB

COLLECTIVE EFFORTS IN MAKING TAMILNADU AS AN EXPORT HUB
Address by Dr. A Sakthivel, Regional Chairman FIEO Southern Region

EPC EXPORT SUMMIT 2017

        The WTO estimate for growth of world trade in 2017 was revised upward to 3.6% from previous estimate of 2.4% and this shows that the recovery of World Trade is eminent and coming years will be better years for exporters. This is substantial increase form 1.3% growth registered in the year 2016. Stronger recovery particularly better demand for imports from US and China expected to increase our export growth in the last quarter of this financial year.

-         India’s economic growth is set to accelerate in the coming months, as the economy started recovering from demonetization- and GST related issues. Economic momentum could be further boosted by the new fiscal package, including higher incentives announced in the Foreign Trade Policy, along with economic prudence expected form this Govt. 

-         The Asian Development Bank predicted that the Indian economy will  pick up in the coming quarters and grow at 7% + in this financial year.

-         Manufacturing has emerged as one of the high growth sectors in India. The government had launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020.  

A recent report by Goldman Sachs titled BRIC - A Road in 2050  –forecast that India will surpass Japan as the third largest economy in the world by 2032. 

-         In many of the sectors India is leader presently irrespective of various constraints and hurdles we are facing. India ranks 3rd in farm and Agricultural output amongst the world.  We are the largest producer of Milk in the world with 19% of world’s output. 

We are top Shrimp exporter and largest producer of instant coffee; Largest producer of food grains’; Second largest fruit producer; largest producer of spices; and many more. One of the estimate of World Bank also states that India can rank amongst the top three growth economies and manufacturing destination of the world by the year 2025.

-         I am sure that the implementation of the Goods and Services Tax (GST)  made India a common market with a GDP of US$ 2 trillion along with a population of 1.2 billion people, which will attract more investment and industrial development in the coming years.

-         Tamil Nadu is poised on a big opportunity of demonstrating leadership and taking on a bold agenda to look beyond the shores of the country and onto the global arena. Consequently, cities such as Chennai, Coimbatore, Tirupur and Madurai have the opportunity to grow into a global city.

-         Tamil Nadu's growth can be powered by sectors such as automotives, textiles, manufacturing, biotech, health, energy, pharma, animation, visual effects, and, of course, IT, where it is already establishing leadership. But leadership isn't good enough; it must become global hubs in these sectors. It must attract investment to drive growth and revenues multi-fold, which will, in turn, help plough investment into the State for development.

-         Tamilnadu especially, Chennai is the hub for auto mobile industry supporting with more than 40 per cent of India's car production and 35 per cent of India's auto-components production, a sizeable part for exports, comes from the region.Tamil Nadu has become a very cost-effective manufacturing hub for automobiles. The export in automotive sector from Tamil Nadu has grown on an average CAGR of 30% per year for the last five years and has reached a turnover of 3.5  billion USD. During 2016-17.Chennai has become the largest export hub for automobiles and components in India.

-         Traditionally, Tamil Nadu is known for automobile Manufacturing. Started in 1840, Simpsons pioneered India's automobile industry rail coaches, motor cars, diesel engines and steam passenger buses. In 1948, Ashok Leyland was started for assembly of Austin cars. The Integral Coach Factory (ICF) was established in October 1955. In 1960s, TVS Group established a number of auto components manufacturing plants. 

Tamil Nadu has emerged as India's largest automobile and auto components exporter in India. Hyundai has made Chennai the manufacturing and export hub for its small cars. There are several brands operating now form India which includes Ford, Caterpillar , Komatsu & Koebelco,  Doosan etc. Nicknamed the "Detroit of India" for its auto industry, Chennai in the coming years will see more opportunities in this sector.

-         Another area of leadership is that of textiles. The State has the distinction of contributing one-third of the total textile production in the country and is a major source of foreign exchange. The handloom sector which Madurai also was strong is a traditional resource. But tradition must keep up with modern taste to stay alive. Better market connects and a better understanding of changing tastes of the customer will result in product diversification.

One advice I wanted to give to new entrepreneurs is that you should look for product diversification and product innovation instead of coping what others are doing in order to become successful in the international market. There are lot of avenues and new opportunities. 

For example for textile sector, there is huge demand for technical textiles. Be it home furnishing with fire proof or dirt proof materials, textiles used for other purposes like agriculture, industry, other than clothing, etc are some of the examples which give you better realization and lesser competition. 

In each sector you are handling will have better opportunities if you look around and find out what others are not able to offer.

-         We are a nation of entrepreneurs. Tamil Nadu accounts for the largest number of MSMEs in India (15 per cent), producing more than 8,000 product varieties for a total investment of Rs 32,000 crore. There are lot of schemes available for promoting micro and small enterprises by developing clusters under the Cluster Development Programme, which will catalyse growth.
-         
The Food Processing Industry is a sun raise industry as world over the habit is changing to Ready to Eat; Ready to Cook segment including in India. By seeing its immense future potential I request EPC to take lead in organizing 20 to 25 entrepreneurs and propose a food processing park in Madurai and from FIEO I promise that we will help in setting up the infrastructure and getting necessary support especially financial support form the Govt. for this venture.

-         Tamil Nadu accounted for 11.50 % of India’s exports with export of 31.51 Billion USD during the year 2016-17.. Tamilnadu it the third largest exporting state after Gujrat (23%) and Maharashtra (21%).  During the year 2014-15 export from Tamil Nadu was to the tune of USD 35.78 which drop down to USD 30.26 during 2015-16 as India’s total exports also contained during this year.

-  Biggest advantage of Tamil Nadu is that it is having presence of export driven industries like Textiles & Garments, Leather,  Automobile and components, Food processing, besides software.  Major products exported form Tamilnadu are Engineering, Automobile and spare parts, Textiles and Garments, Leather products, Chemicals, Agro & Processed Food, Marine products, Jewellery, etc.

-        Major markets to which Tamil Nadu  products are being exported are  USA (45%), UK (16%), EU (15%), UAE (14%) Africa (4%), Japan (3%), etc.

-         Tamil Nadu is blessed with a unique location on the coastline of India and has the resources as well as determination to transform itself into an Export Hub for the nation. There are several projects in the pipe line to connect all industrial hubs in Tamil Nadu with gate way Ports and I am sure that with entrepreneurs like you with supported by EPC and Chamber will help in make Tamil Nadu the top exporting state in India.

-         Tamilnadu is one of those few states in the country that can become an export hub due to the available infrastructure, geographical location and availability of resources. The state currently has a very well developed road network that connects both the rural and the urban areas. The state also falls under the Golden Quadrilateral NH project that connects many of the major industrial, agricultural and cultural centers of India making it easily accessible by road.

-         However there are some concerns especially related to MSME in Exports which includes : High Cost of credit ,Lack of Technology, Less marketing Exposure, Liquidity crunch under GST , High Transaction Cost, etc.

Dr. A Sakthivel, 
Regional Chairman 
FIEO Southern Region


-         FIEO taken lot of efforts to attend above issues and I am happy to inform you that in the Mid-term review of Foreign Trade Policy some of the issue has been attended and many are under consideration of the Government.

The credit rate in India is at-least 6% above international benchmark. For example, In a sector where the procurement of inputs  to exports takes 9 months and value addition is 20% , exports competitiveness is lost by 5%. 

Interest Equalisation Scheme provides 3% interest supports to MSME manufacturers. FIEO suggested the Govt to cover this scheme to Merchant exporters as well.

Credit Link Capital Subsidy Scheme  providing interest subsidy of 15% for loan upto Rs 1 Cr is available.  EPCG Scheme providing duty free imports for exports against an exports obligation which helps the MSME to upgrade technology.

As per Government own estimates, Transaction Cost of Exports varies between 8 to 13 %. MSMEs are paying a further higher cost due to lack of knowledge and less adaptation of technology, system issues, etc. 

India has rectified the Trade Facilitation Agreement aiming to reduce such cost . Government efforts for Ease Of Doing business also to supplement in reducing cost .

FIEO provides an Integrated platform to the businessmen dealing in Multi Products. We are having Bilateral agreements for exchange of information with over 64 overseas organisations  there by able to provide  Importers address & Contact details to the exporters. 

We are also providing Market Development Assistance and subsidize stall charges in international trade fairs. In an year we are participating more than 50 international trade fairs and taking small and medium exporters to explore the potential markets. 

Apart form Taking up Issues/Problems of Members we are also having Live Chat with Members on forex trends, , Policy clarification, international marketing,  etc.

FIEO also actively participating in Enterprise Europe Network focusing MSMEs for Technology and Marketing Support.  The Network organizes face-to-face meetings between European SMEs and busineses in India my match making exercise. 

This network also generates partnership proposals apart form providing  information about industrial rules & regulations, standards, certification requirements and customs matters.

You may also aware that FIEO launched an information portal for exporters and importers - INDIAN TRADE PORTAL which provides all information required by an entrepreneur  who wishes to start his business in international trade. Hope many of you are using this Portal.

I am extremely happy to learn that EPC is making inroads in Tamil Nadu especially in smaller towns where there is lack of information flow. I am also happy to meet many entrepreneurs who have started their business due to initiatives of EPC and grown which shows the effectiveness and commitment of the team and I congratulate Mr. Rajan and his team for excellent works done for promoting exports from this part of the state. 

I promise all necessary help from FIEO to EPC and I am sure that we can work together for encouraging more and more entrepreneurs to join in export fold.

Strategic planning, due diligence, consistent follow-up, and perhaps most importantly, patience and commitment are all prerequisites to successful business in international trade. This necessitates multiple marketing efforts that address differing regional opportunities, standards, languages, cultural differences, and levels of economic development. 

Gaining access to international markets requires careful analysis of consumer preferences, existing sales channels, and changes in distribution and marketing practices, all of which are continually evolving. 

Issues of sales channels, distribution and marketing practices, pricing and labeling, and protection of intellectual property, etc are also very important in international business. To overcome various hurdles, FIEO organize series of programmes and I am happy to learn that FIEO could also join with EPC in organizing some progrmames in Madurai for the benefit of exporters here.

Tamil Nadu as I mentioned earlier having huge potential to become NO.1 state in exports as we have immense potential to grow in various verticals of products. Each districts we have niche products which is competitive and each district if focus on these products, I am sure we can achieve this in very short span of time. FIEO is ready to work with EPC and Chambers to reach grass root level and help entrepreneurs to overcome various hurdles and face challenges in the international markets.

In Tamil Nadu, after Chennai and Coimbatore, Madurai is having huge untapped potential for exports and I am happy to note that Mr. Rajan and his team is doing excellent work towards this direction.

With this word, I thank EPC for providing me this opportunity and wish them all success.


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