Home sales up 34% QoQ in third quarter of calendar 2020, velocity down: JLL

 Residential sales improved in the third quarter of calendar 2020, rising by 34 per cent the figure in Q2, says a new study. However, sales velocity had come down in the third quarter, according to a new study.

The expected time to liquidate stock has increased from 3.6 years in Q2 of 2020 to four years in Q3, says a report by JLL Research.

Mumbai accounted for 29 per cent of the total sales in the quarter, while 22 per cent came from Delhi NCR. Sales growth was also driven by stronger demand in Chennai, Hyderabad and Pune, said JLL Research.

“We are feeling cautiously optimistic about the residential market, driven by sales volumes in Mumbai and Delhi. Favourable factors such as low mortgage rates, attractive prices combined with developers’ lucrative payment plans reinforce the longer-term potential of the sector. For end users, the next 12 months are ideal to buy a house.” said Ramesh Nair, chief executive and Country Head, India, JLL.

“In the subsequent quarters, the translation of demand into sales will primarily hinge on enhanced consumer confidence, which in turn depends upon the continued implementation of progressive government policies amid the gradual revival of the Indian economy at large.” he added.

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Residential market activity is also being supported by renewed interest from non -resident Indians in Q3 2020, resulting in more pent up demand in the market and increased enquiries received by developers.

“The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market.

While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,” said, Samantak Das, chiief economist and head of Research & REIS, India, JLL.

New launches were restricted, with 12,654 units launched in the third quarter, a QoQ decline of 14 per cent, JLL said. Hyderabad and Mumbai accounted for over 60 per cent of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80 per cent as compared to Q2 2020.

Development focus on mid and affordable segments continued in Q3 2020 with nearly 75 per cent of the new launches in the sub Rs one crore category. Moving ahead, the focus on these price segments is expected to continue with developers focussing to reap the benefits of strong pent up demand.

The Q3 2020 witnessed sales outpacing new launches as unsold inventory across the seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata) decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50 per cent of the unsold stock which are at various stages of construction.

NCR, Mumbai stare at up to $1.7bn per week loss due to shutdown: Barclays

The National Capital Region (NCR) and Mumbai – the two ‘megacities’ – according to a recent Barclay’s research, will be the two most impacted in India due to the 21-day lockdown, followed by Bengaluru, Hyderabad and Pune.
The report co-authored by Rahul Bajoria, chief economist at Barclays has studied the Asia – Pacific (Asia-Pac) regions currently under lockdown and pegs the economic loss impact in these regions between $1 billion to $1.7 billion per week.
“We find that the absolute economic loss is likely be the largest from the shutdown of Kuala Lumpur, Manila, Delhi (NCR) and Mumbai, ranging from $1 billion - $1.7 billion per week. However, in percentage of GDP terms, we find that lockdowns in Kuala Lumpur (Malaysia), Bangkok (Thailand) and Manila (Philippines) pose the biggest downside risk,” the Bajoria co-authored report says.
A megacity is typically defined as a city or an urban cluster which has more than 10 million population. However, given the nature of the Asia Pacific’s small, open economies, Barclays loosened the definition for this project to include the biggest economic hubs or key metropolitan cities / regions where the gross domestic product (GDP) data was available with relative ease. For NCR, Barclays has included Delhi and satellite towns of Noida, Gurugram and Ghaziabad.
So far, within Asia, cities such as Mumbai, Delhi, Manila and Kuala Lumpur are under full lockdown, while Bangkok, Sydney, Melbourne, Jakarta and Singapore are deemed to be under partial lockdown. The only megacity in the region where activity is close to ‘normal’ is Taipei, but has not been covered in the study given the lack of city-level data.
While the cities under a severe state of lockdown are experiencing a greater amount of absolute economic loss right now, Barclays believes if the lockdown becomes uniformly severe in other cities, the economic costs for small open economies, where megacities tend to dominate activity, will rise rapidly.
NCR, Mumbai stare at up to $1.7bn per week loss due to shutdown: Barclays
“The difference in the level of lockdown will drive material growth divergence across Asia-Pacific. Indeed, as a percentage share of their own respective GDP, we find that at the current juncture, the economic loss is the highest in Kuala Lumpur, followed by Mumbai, Delhi and Manila, reflecting the stringent nature of their lockdowns,” Barclays believes.
In most economies, Bajoria says, the loss of output is largely non-tradable, and hence is unlikely to be recovered even when activity levels normalise. That is in contrast to manufacturing-sector dominated cities such as Gyeonggi in Korea, Pune in India, and the rest of Luzon.

NCR, Mumbai stare at up to $1.7bn per week loss due to shutdown: Barclays
"If the clampdown in other cities with moderate levels of activity disruption were to rise, the economic losses in cities such as Sydney, Melbourne, Seoul, Jakarta and Singapore will rise as well. As such, while currently these cities have had limited loss of output, their downside is greater from here on, unless they find a way to control the spread of the disease," Barclays said.

I-T dept searches 39 locations to check tax evasion by BSE brokers, traders

The income tax department has carried out search operations on certain share-brokers and traders for allegedly executing fraudulent trades in illiquid stock options.
Over 39 locations spread across Mumbai, Kolkata, Kanpur, Delhi, Noida, Gurugram, Hyderabad and Ghaziabad were covered under the operation, the department said in a statement on Saturday.

These brokers were involved in facilitating accommodation of profits/loss through reversal trades in illiquid stock options in equity derivative segment and also currency derivative on the BSE, it said.
The search or survey action has unravelled the entire modus-operandi which has been adopted by the share-brokers and traders to trade into the illiquid stock options in equity derivative segment and thereby generate artificial losses or profit by executing reversal trades in a very short span of time.
"By this contrived methodology, the unscrupulous entities have secured desired profits/losses, which is estimated to be more than Rs 3,500 crore. The search/survey action has also resulted into identification of the wrongful long-term capital gains taken in at least 3 penny stocks listed on the BSE, where the manipulated profits utilized by the beneficiaries aggregate to around Rs 2,000 crore," it said.
The search action has resulted into seizure of unaccounted cash of Rs 1.20 crore.
The number of beneficiaries who have been benefitted by these manipulated transactions could be to the tune of a few thousand scattered across India and efforts are being made to identify them as also the corresponding quantum of income evaded.

National Textile Corp fined Rs 1.4 bn over use of govt land sans permission

The Mumbai district collector's (city) office has levied a fine of Rs 1.4 billion on the National Textile Corporation (NTC) in connection with the redevelopment of a mill land in Byculla here sans requisite permissions, payment of lease rent and redevelopment charges.
District Collector Shivaji Jondhale confirmed the development and said a communication to this effect was sent to the NTC on July 3.

According to the official, the corporation had seven mills in Mumbai.
In the 90s, when the mill redevelopment began, the lands were divided into three parts - two of which went to the Brihanmumbai Municipal Corporation (BMC) for development of garden and to the Maharashtra Housing and Area Development Authority (MHADA) for constructing a residential building meant for mill workers.
The remaining part was sold to a private developer.
The fine slapped pertains to the plot handed over to the MHADA.
"The government land they (NTC) had given to MHADA was a leased one (New Kaiser Mills plot, admeasuring over 30,000 sq m). But it handed over the land to MHADA after the lease expired. It was a government land. So, it means that they handed over the government land to the government itself," Jondhale said.
"They have not paid the lease rent and redevelopment charges. They should have sought redevelopment permission from the Maharashtra government," he added.

Last-minute airfares rise 40% as downpour disrupts Mumbai airport

Last minute airfares rose 35-40 per cent as rains and closure of main runway at Mumbai airport disrupted operations. On Tuesday 55 flights were diverted and over 200 flights were cancelled from Mumbai  because of rain, low visibility and poor braking action on secondary runway.
Airlines canceled nearly 80 flights on Wednesday which included both arrival and departures from Mumbai. Flights continued to be delayed as the secondary runway at Mumbai has a lower aircraft handling capacity.

The disruption of operations has pushed up last minute airfares for flights from Mumbai, according to travel website ixigio. "Heavy rainfall in Mumbai has impacted close to 400 flights in the last two days due to disruption in flight schedules. Cancellation of flights has also triggered a rise in last-minute average fares by 35-40 per cent on key routes to and from Mumbai. With disruptions expected to continue in the coming days, we have seen a 22 per cent increase in passengers rescheduling their Mumbai bound flights to next week," said Aloke Bajpai, CEO & co-founder, ixigo.
A SpiceJet Boeing 737 operating a Jaipur-Mumbai flight overshot the main runway on landing on Monday night. The main runway was shut for operations and measures have been initiated to remove the aircraft which has stuck in soft ground hundred metres outside the runway. Air India engineers were working to remove the disabled aircraft and expected to complete the task by Wednesday night.

IL&FS case: NCLT gives Axis and Stanchart CEOs, Bawa 2 weeks to file reply

The Mumbai bench of National Company Law Tribunal (NCLT) on Friday issued notices to Amitabh Chaudhary, CEO of Axis Bank, Zareen Daruwala, CEO of Standard Chartered Bank, Ramesh Bawa and his wife for violating the tribunal's order.
It has also asked them to furnish their replies to the contempt pleas filed against them within two weeks.

Moreover the tribunal has allowed the Ministry of Corporate Affairs to make Ramesh Bawa's wife and daughter as respondents in the original case, as they were beneficiaries of the money swindled by him when he is was in IL&FS.
The tribunal said that the order restraining the directors of the company from alienating their assets will also apply to wife and daughter of Ramesh Bawa.
MCA said Ramesh Bawa had transferred Rs 3.84 crore from his ICICI Bank account to his daughter Akansha Bawa on December 3, fully aware that a petition was being filed before the NCLT to freeze their assets.
Subsequently while the hearing for freezing of the assets of IL&FS directors was on, Bawa further transferred Rs 1.14 crore from his Axis Bank account.
And, while an order was passed restraining the company's directors from disposing off their assets, Bawa had accessed his lockers in Axis Bank and Standard Chartered. The government is not aware of the contents of the lockers or what has been done to them.
The government had alleged that the lockers along with the bank accounts were operated despite giving notice of the tribunal order to banks and Indian Bank Association.
On Thursday, the MCA had moved contempt pleas against CEOs of the two banks and erstwhile CEO of IFIN, a group company of the beleaguered group.

Homeowners in India roll up sleeves to complete unfinished flats

Lalit Vazirani, a computer programmer from Mumbai, never reckoned on having to turn amateur property developer.
Yet here he is, a decade after putting down a deposit for an apartment near the city's airport, dealing with architects, taxes, various planning permissions and even court hearings. All because the developer behind the $50 million project has gone bust, and nobody else has stepped in to finish the work.

"We never in our wildest dreams imagined one day we would take on the functions and the role of a developer,” said Vazirani, 45, who bought the two-bedroom unit before construction started. “But fate had other plans.”
Few things illustrate the malaise in India’s property market as starkly as would-be homeowners having to dedicate untold hours to completing the flats they spent years saving up for. While no estimates exist for the number of people in Vazirani’s position, India’s property market is struggling to digest some $65 billion worth of projects in various stages of completion -- or, in many cases, non-completion.
It’s an issue with the potential to sap confidence among house buyers, further complicating developers’ attempts to claw their way out from under a mountain of debt.
Weakened Faith
So many delayed building projects have “severely weakened faith in any under-construction properties and reviving buyers’ trust is a Herculean task,” said Anuj Puri, the chairman of Anarock Property Consultants Pvt. “If buyers stop purchasing, builders will have a far more challenging time to get funds from external sources for construction.”
Two years ago, India introduced a law with strict punishments for building delays.
A series of economic shocks in the past three years, from the unexpected withdrawal of high-value rupee notes in 2016 to the sales tax introduced the following year, have dented property-market sentiment and caused funding for developers to dry up. Many lack the funds to keep projects aimed at millions of more affluent citizens going.
An analysis of about 11,000 home builders by research firm Liases Foras in February showed that developers on average have to repay twice as much in debt each year as the income they generate that can be used to service it. This comes as property prices in India’s biggest cities are flagging -- home values in Mumbai sank 11 percent last year following a 5 percent decline in 2017. They ran up 32 percent in the four years through 2016.
Band of Buyers
Vazirani is one of 281 buyers who banded together to complete their development, which currently consists of the skeletons of six buildings standing on an otherwise deserted site. Developer Orbit Corp., which specialized in mid- to high-end apartments, collapsed in 2016.
The immense task has taken time away from Vazirani’s day job and is starting to take a toll. “It’s very disheartening, but we know we have no option, we have to continue this fight,” he said.
He’s not alone. Home buyers at a Nirmal Lifestyle project in the northeast Mumbai suburb of Mulund are lending the developer more money so it can complete the final stages of a tower. At a housing development in the state of Uttar Pradesh, purchasers will monitor construction after a local regulator stepped in. The buyers of the unfinished project had approached the state’s real estate regulator seeking a handover of the project to them after it had been stuck for three years and the builder had run out of money.
Bleak Outlook
With would-be home buyers reluctant to hand over cash for deposits, the funding horizon for developers looks bleak. Builders’ debt repayments amount to $18.5 billion each year, the Liases Foras data show. On top of that, some lenders have sharply increased the interest rates they charge developers for new loans.
Already, real estate and associated businesses account for the largest number of cases referred to India’s two-year-old bankruptcy process. Around 235 of the companies are under the insolvency-resolution process, government data show.
Orbit’s former Chief Executive Officer Pujit Aggarwal says he’s trying to help by providing the group with construction and regulatory expertise. Aggarwal was taken into custody in 2016 for allegedly cheating apartment purchasers. He wasn’t convicted and the Bombay High Court granted him bail in July 2017. Soon after, his company was referred to a bankruptcy court.
‘End in Sight’
“It’s a collaborative effort between buyers, myself and other stakeholders to make sure there’s an end in sight,” Aggarwal said. “Buyers are putting in the money and have shown tremendous resilience to take over and move ahead.”
It was “just bad investment decisions” that resulted in Orbit’s undoing, he said. The company had bought some large land plots that dented cash flows and trying to fund long-duration projects with short-term loans aggravated the situation. Regulatory changes also affected building plans.
That’s of little comfort to Sarju Saini, a 51-year-old chartered accountant who put money down for an Orbit apartment off the plan in 2009. His unit was meant to be finished by 2013.
“I had put in all my savings for this flat,” he said. “Now for completion of the project I will need to take another loan. I may have to borrow from my friends, family or in-laws. This would have been our first house, and we had so many dreams attached to it.”

Monsoon hits Maharashtra, Odisha; IMD forecasts 'heavy rains' in Mumbai

Mumbai, along with other places on the Konkan coast and Goa, is expected to receive extremely heavy rainfall between June 9 and 11. The India Meteorological Department (IMD) predicted similar weather conditions for Chhattisgarh, Odisha, Coastal Andhra Pradesh, Telangana, Karnataka and Kerala.
"Extremely heavy rain at isolated places over Konkan & Goa and Madhya Maharashtra," an IMD weather warning bulletin for 9 June stated.
As per IMD, monsoon has advanced to parts of central Arabian Sea, Goa, Karnataka, Rayalaseema region and coastal Andhra Pradesh, parts of south Konkan, south-central Maharashtra, Marathwada, Vidarbha, south Chhattisgarh, south Odisha, Telangana, and west-central and north Bay of Bengal.
The weather department said on Friday that monsoons could further advance into the central Arabian Sea, Maharashtra, Chhattisgarh and Odisha and remaining parts of coastal Andhra Pradesh in the next 24 hours.
"Increased rainfall activity over coastal Karnataka, Goa and south Maharashtra is likely to continue till June 10. It is very likely to extend to north coastal Maharashtra, including Mumbai, from tomorrow. Extremely heavy rainfall at isolated places in these regions is very likely during this period," the IMD said.
Isolated places in the eastern region of the country is also expected to witness ""heavy to very heavy rainfall" from June 9-11. The IMD said a low pressure area is "very likely" to form over north Bay of Bengal during next 24 hours and it is "very likely" to intensify into a depression during the subsequent 48 hours and move towards the Bangladesh coast.
The phenomenon, according to IMD, will lead to heavy rains at isolated places in Odisha, West Bengal, Sikkim, Assam and Meghalaya.
Monsoon hits Odisha ahead of schedule
The Southwest monsoon hit Odisha on Friday, two days ahead of the scheduled arrival in the state.
"Southwest monsoon has touched some parts of Malkangiri district today, two days before the expected date of onset of monsoon," Director of the Meteorological Centre in Bhubaneswar, H R Biswas told agencies on Friday.

Worst buy and sell calls of Ambit Capital in the last 12 months

Even the biggest of brokerages and the best of analysts, at times, fail in their assessment of how the markets will play out. In a note, Mumbai – based Ambit Institutional Equities, has yet again owned up to making bloopers / mistakes over the past 12 months.
“After some soul searching, the team presents the worst of its buys and sells over the past 12 months. In addition, this time, the team has put together a survey to get direct feedback from clients – on what its biggest mistakes were. The aim is to collate this feedback and introspect,” the Ambit note said.
Also Read: Our FY19-end target for Sensex is around 34,000, says Ambit Capital CEO
Last year, too, Ambit had owned up to making mistakes in its stock selection and the economic situation, with the biggest of them being an incorrect estimation of the impact of government’s demonetisation plan. In 2017, Ambit identified three stocks – Bajaj Finance, Britannia and Larsen & Toubro (L&T) – where its calls / prediction went wrong.
Here is a quick compilation Ambit’s self-assessment of the last 12 months.
Worst BUYs:
Tata Power and our unrequited love: We’ve been buyers for over five years; the stock has been flat throughout. People look for earnings stability, we were looking for stock price stability!
Dish TV and the perennial wait for average revenue per user (ARPU) increase! Our initiation at Rs75 in March 2016 has proven to be a good resistance. Free Dish played spoilsport.

Also Read: India's Bull market has entered final lap, says Ambit Capital
India’s oil marketing companies and our resolute faith in them despite limited ability to predict crude, currency or government behaviour; stocks are down over 25 per cent from peaks.
VA Tech Wabag, DB Corp and Greaves Cotton: Stocks that we love that no one else cares about. Each is down more than 20 per cent.
Bharat Electronics and our continuous upgrades even at peak multiples on peak earnings; the stock is down over 40 per cent from its peak.
The agro-chem cycle turn that never came: We have predicted it was “just around the corner” for two years now. Biggest bet – PI Industries; stock flat for a year.
Worst SELLs:
D-Mart and the missed bus to India’s best grocery retailer: Despite the best pre-IPO research (management said so too!), we initiated with a SELL; the stock is up 35 per cent since then.
Jubilant Foodworks and the lowest target price on the street: Stellar same store growth (SSG) growth and margin expansion. The stock gained 175 per cent in 12 months. Confession: It is the best performing stock in our coverage.