Monday 31 October 2011
NSE gets SEBI approval for SME platform
The National Stock Exchange today received formal approval from SEBI to set up a new SME platform.
NSE has been in touch with leading SME (Small and Medium Enterprises ) financing institutions, rating agencies, venture firms and a large number of SME entrepreneurs to successfully bring them together on NSEs new SME platform.
MD & CEO of NSE, Mr. Ravi Narain said We are committed to provide a credible and efficient market place for young & growing enterprises to raise capital from informed investors.
The convergence of various stakeholders and market participants is important for the success of the platform and NSE has been working intensively to make this possible.
This platform will not only make capital available to large number of companies but will also act as a catalyst for venture capital in the country as, it will provide exit opportunities to early stage risk investors.
NSE has been in touch with leading SME (Small and Medium Enterprises ) financing institutions, rating agencies, venture firms and a large number of SME entrepreneurs to successfully bring them together on NSEs new SME platform.
The convergence of various stakeholders and market participants is important for the success of the platform and NSE has been working intensively to make this possible.
This platform will not only make capital available to large number of companies but will also act as a catalyst for venture capital in the country as, it will provide exit opportunities to early stage risk investors.
Trading on BSE through ''NoW''
NSE is pleased to announce that some members have begun to connect their servers in co-location facility offered by NSE to their other servers located in facilities offered by BSE or by other reputed third party infrastructure providers. Members can also provide inter-exchange algo trading from servers in co-location facility or servers located outside. In addition, all NSE market segments will be available shortly on FoW (Fast Trade on Web) a facility provided by Market Place Infratel Pvt. Ltd., a subsidiary of BSE. Similarly, all BSE market segments will be available shortly on NoW (NEAT on Web) a facility provided by DOTEX, a subsidiary of NSE.
NSE has issued a NSE circular pertaining to trading on BSE through NoW (NEAT on Web) and details for the same are as appended below:
NSE is pleased to announce that some members have begun to connect their servers in co-location facility offered by NSE to their other servers located in facilities offered by BSE or by other reputed third party infrastructure providers.
Members can also provide inter-exchange algo trading from servers in co-location facility or servers located outside. In addition, all NSE market segments will be available shortly on FoW (Fast Trade on Web) a facility provided by Market Place Infratel Pvt. Ltd., a subsidiary of BSE. Similarly, all BSE market segments will be available shortly on NoW (NEAT on Web) a facility provided by DOTEX, a subsidiary of NSE.
This is a remarkable feat and if it becomes feasible to settle trades of both exchanges at a single platform one will be able to undertake the arbitrage opportunity available on one exchange without any problem. Do remember to visit the website for daily free Nifty tips and make money like professionals in the market.
NSE has issued a NSE circular pertaining to trading on BSE through NoW (NEAT on Web) and details for the same are as appended below:
NSE is pleased to announce that some members have begun to connect their servers in co-location facility offered by NSE to their other servers located in facilities offered by BSE or by other reputed third party infrastructure providers.
Members can also provide inter-exchange algo trading from servers in co-location facility or servers located outside. In addition, all NSE market segments will be available shortly on FoW (Fast Trade on Web) a facility provided by Market Place Infratel Pvt. Ltd., a subsidiary of BSE. Similarly, all BSE market segments will be available shortly on NoW (NEAT on Web) a facility provided by DOTEX, a subsidiary of NSE.
This is a remarkable feat and if it becomes feasible to settle trades of both exchanges at a single platform one will be able to undertake the arbitrage opportunity available on one exchange without any problem. Do remember to visit the website for daily free Nifty tips and make money like professionals in the market.
Securities listed and admitted to dealings with NSE & BSE
Securities listed and admitted to dealings
| Sr.No. | Symbol | Series | Company Name | ISIN Code | Date of Listing |
| 1 | TRITURBINE | BE | Triveni Turbine Limited | INE152M01016 | |
| 2 | PILANIINV | BE | Pilani Investment and Industries Corporation Limited | INE417C01014 | |
| 3 | HIRAFERRO | EQ | Hira Ferro Alloys Limited | INE573I01011 | |
| 4 | PANCHSHEEL | EQ | Panchsheel Organics Limited | INE316G01019 | |
| 5 | KRITIIND | EQ | Kriti Industries (India) Limited | INE479D01038 | |
| 6 | SHAKTIPUMP | EQ | Shakti Pumps (India) Limited | INE908D01010 | |
| 7 | SARTHAKIND | EQ | Sarthak Industries Limited | INE074H01012 | |
| 8 | VASWANI | EQ | Vaswani Industries Limited | INE590L01019 | |
| 9 | MBSWITCH | EQ | M AND B Switchgears Limited | INE899L01014 | |
| 10 | FLEXITUFF | EQ | Flexituff International Limited | INE060J01017 | |
| 11 | TAKSHEEL | EQ | Taksheel Solutions Limited | INE889I01011 | |
| 12 | ONELIFECAP | EQ | Onelife Capital Advisors Limited | INE912L01015 | |
| 13 | SEINV | EQ | S.E. Investments Limited | INE420C01042 | |
| 14 | NCOPPER | EQ | Nissan Copper Limited | INE846H01039 | |
| 15 | TIJARIA | EQ | Tijaria Polypipes Limited | INE440L01017 | |
| 16 | PRAKASHCON | EQ | Prakash Constrowell Limited | INE023M01019 | |
| 17 | PANAMAPET | EQ | Panama Petrochem Limited | INE305C01011 | |
| 18 | PGEL | EQ | PG Electroplast Limited | INE457L01011 | |
| 19 | APLLTD | BE | Alembic Pharmaceuticals Limited | INE901L01018 | |
| 20 | APLLTD | EQ | Alembic Pharmaceuticals Limited | INE901L01018 |
Stock Trading Tips for 01 Nov 2011
Stock Trading Tips for 01 Nov 2011
| Scrip | Trigger | Price | Stop Loss | Target 1 |
|---|---|---|---|---|
| WIPRO | BUY ABOVE | 370 | 366 | 376 |
| SELL BELOW | 363 | 366 | 356 | |
| TCS | BUY ABOVE | 1,127 | 1,116 | 1,139 |
| SELL BELOW | 1,104 | 1,114 | 1,092 |
Nifty Spot Medium Term Level for 01 November 2011
Nifty Spot Medium Term Level for 01 November 2011 | |||
| Support 1 | 5145 | Resistance 1 | 5490 |
| Support 2 | 5037 | Resistance 2 | 5317 |
Nifty Spot Short Term Level for 01 November 2011 | |||
| Support 1 | 5082 | Resistance 1 | 5211 |
| Support 2 | 5045 | Resistance 2 | 5124 |
After five years , the state government re-enter the cement retail business in Tamil Nadu and Kerala
After a gap of five years , the state government has decided to re-enter the cement retail business in Tamil Nadu and Kerala with a view to reining in the skyrocketing prices .
At a timewhen private manufacturers sell cement at Rs 280 to Rs 300 per 50kg bag , the Tamil Nadu governmentowned Tamil Nadu Cements Corporation (TANCEM) will sell its Arasu brand at Rs 255 per bag to retailers and at Rs 240 per bag to bulk purchasers . A senior official said , "We promise to slash the prices further if private manufacturers join the competition . Our rates will be always kept below that of private players ." The builders' community has welcomed the move . DLF executive vicepresident KK Raman said , "It's a good initiative from the government . It may lead to cement prices heading southwards . Cost of construction will come down if private playersfollowsuit ."
TANCEM proposes to first clear its stock of nearly 6,000 tonnes that has piled up in various godowns. Over and above that, depending on the demand, it will push another 2,000 tonnes a day into the market.
Though TANCEM has an installed capacity of about 9 lakh tonnes per annum, one of its kilns at Alangulam in Virudhunagar district is shut down and its effective production is only 7 lakh tonnes as of now. The supply would be routed through about 200-odd active stockists of TANCEM in the Tamil Nadu and Kerala.
At a timewhen private manufacturers sell cement at Rs 280 to Rs 300 per 50kg bag , the Tamil Nadu governmentowned Tamil Nadu Cements Corporation (TANCEM) will sell its Arasu brand at Rs 255 per bag to retailers and at Rs 240 per bag to bulk purchasers . A senior official said , "We promise to slash the prices further if private manufacturers join the competition . Our rates will be always kept below that of private players ." The builders' community has welcomed the move . DLF executive vicepresident KK Raman said , "It's a good initiative from the government . It may lead to cement prices heading southwards . Cost of construction will come down if private playersfollowsuit ."
Though TANCEM has an installed capacity of about 9 lakh tonnes per annum, one of its kilns at Alangulam in Virudhunagar district is shut down and its effective production is only 7 lakh tonnes as of now. The supply would be routed through about 200-odd active stockists of TANCEM in the Tamil Nadu and Kerala.
Unitech new township Project in Gurgaon
The Crestview Apartments is being launched as a part of Wildflower Country, a 100-acre township in sector 70, Gurgaon, being developed by Unitech.
Unitech expect to generate a sales-booking of Rs 400 crore from this project over 2 months and also, expect to garner revenue of Rs 2,000 crore, from Wildflower Country Township over the next 3 to 4 years.
Highlights of Crestview Apartments..!
* Crestview offers apartments in sizes ranging from 925 - 1,402 sq.ft in G+13 level towers with each floor having four flats.
* It will spread across 7 acres of land, and has a total saleable area of more than 6 lakh sq. ft.
* It offers 2 & 3 bedroom flat with basic price of approx Rs. 65 lakh & Rs. 73 lakh, respectively.
* There are some other charges such as government/statutory charges, car-parking charges over and above the basic price.
* Every flat will come equipped with the modern amenities like imported marble flooring in living/dining, split air-conditioning in all rooms.
* The Crestview project offers social infrastructure and amenities such as shopping area, Bank and ATM, sewage treatment, rainwater harvesting, and provision for public transportation area such as taxi stand.
Unitech expect to generate a sales-booking of Rs 400 crore from this project over 2 months and also, expect to garner revenue of Rs 2,000 crore, from Wildflower Country Township over the next 3 to 4 years.
Highlights of Crestview Apartments..!
* Crestview offers apartments in sizes ranging from 925 - 1,402 sq.ft in G+13 level towers with each floor having four flats.
* It will spread across 7 acres of land, and has a total saleable area of more than 6 lakh sq. ft.
* It offers 2 & 3 bedroom flat with basic price of approx Rs. 65 lakh & Rs. 73 lakh, respectively.
* There are some other charges such as government/statutory charges, car-parking charges over and above the basic price.
* Every flat will come equipped with the modern amenities like imported marble flooring in living/dining, split air-conditioning in all rooms.
* The Crestview project offers social infrastructure and amenities such as shopping area, Bank and ATM, sewage treatment, rainwater harvesting, and provision for public transportation area such as taxi stand.
TMB and LIC have entered into an agreement as Bancassurance partners for life insurance.
Speaking to reporters here recently, managing director and CEO of Tamilnadu Mercantile Bank A K Jagannathan said through this Bancassurance tie up, the bank's customers will get the benefit of the wide array of insurance products through 243 branches, 11 extension counters and seven regional offices throughout the country. As LIC is having products for each and every segment of the population and area, it will be a win-win situation for both TMB and LIC of India, he added.
So far the bank has already issued 1586 policies and collected premium of Rs 8.43 crore. Managing director of LIC of India A K Dasgupta said this partnership would take the mission of LIC to a newer height.
T.Nagar Saravana Stores, Chennai Silks and 60 other business centers sealed
CMDA today sealed over 60 leading textile, jewellery showrooms and small shops in the city's commercial capital of T Nagar for violating building norms.
Officials from Chennai corporation and CMDA have sealed 61 business establishments including Saravana Stores,Chennai Silks Kumaran Thanga maligai today.
CMDA sources said they had issued notices to more than 60 shops in the area for unauthorised construction and sealed them this morning. The exercise, which began in the wee hours, continued till 9 am. The otherwise busy Ranganathan Street and Usman Road wore a deserted look as the news spread.
Civic authorities issued notices to these shops asking them to show cause why those buildings constructed without proper permission should not be demolished.
The authorities also pasted notices on the gates of the shops saying that the premises were sealed till further orders. Tension prevailed as owners of some shops and the employees, who turned up for work this morning, tried to break the orders. At a few shops, the authorities ordered the employees who were staying inside to leave and then sealed the premises. The relenting staff were warned that police action would be initiated if they refuse to leave the premises.
A large posse of police personnel were deployed on North Usman Road and in the Ranganathan Street, considered as common's man's shopping paradise, when the Chennai City Corporation authorities and CMDA officials sealed the premises.
Among the shops that were sealed by the authorities included leading textile and jewellery chain Saravana Stores, which runs more than a dozen shops in the locality, Chennai Silks, Rathna Stores, Khadims and Jeyachandran Textiles' chain of stores.
These showrooms earn large profits from a huge volume of sales. Some of the smaller shops, located in the area were also sealed for violating building construction norms.
Officials from Chennai corporation and CMDA have sealed 61 business establishments including Saravana Stores,Chennai Silks Kumaran Thanga maligai today.
CMDA sources said they had issued notices to more than 60 shops in the area for unauthorised construction and sealed them this morning. The exercise, which began in the wee hours, continued till 9 am. The otherwise busy Ranganathan Street and Usman Road wore a deserted look as the news spread.
Civic authorities issued notices to these shops asking them to show cause why those buildings constructed without proper permission should not be demolished.
The authorities also pasted notices on the gates of the shops saying that the premises were sealed till further orders. Tension prevailed as owners of some shops and the employees, who turned up for work this morning, tried to break the orders. At a few shops, the authorities ordered the employees who were staying inside to leave and then sealed the premises. The relenting staff were warned that police action would be initiated if they refuse to leave the premises.
A large posse of police personnel were deployed on North Usman Road and in the Ranganathan Street, considered as common's man's shopping paradise, when the Chennai City Corporation authorities and CMDA officials sealed the premises.
Among the shops that were sealed by the authorities included leading textile and jewellery chain Saravana Stores, which runs more than a dozen shops in the locality, Chennai Silks, Rathna Stores, Khadims and Jeyachandran Textiles' chain of stores.
These showrooms earn large profits from a huge volume of sales. Some of the smaller shops, located in the area were also sealed for violating building construction norms.
Saturday 29 October 2011
Deputy Mayor candidates List Live Update
B Benjamin would be the party's nominee for the Chennai Deputy Mayor's post, party supremo and Chief Miniser Jayalalithaa said in a statement.
Other nominees are:
The party also announced its nominees for the president posts of 31 district panchayats.
Other nominees are:
- M Asimmeera, son of deceased minister Mariam Pitchai (Tiruchirapalli),
- M Natesan (Salem),
- K C Palanisamy (Erode),
- K Gunasekaran (Tiruppur),
- K Chinnadurai (Coimbatore),
- R Gopalakrishnan (Madurai),
- P Ganesan (Tirunelveli),
- P Xavier (Tuticorin) and
- Dharmalingam (Vellore).
The party also announced its nominees for the president posts of 31 district panchayats.
Friday 28 October 2011
Chennai extending up to Chengalpattu and Kancheepuram
A large area around Chennai extending up to Chengalpattu and Kancheepuram is set to be designated as one single urban region for planning purposes. In the face of rapid increase in population in the districts surrounding Chennai and the expansion of the city, a new regional planning model on the lines of National Capital Region, Delhi, is being examined by the Chennai Metropolitan Development Authority (CMDA).
Government sources say three kinds of planning regions are under consideration. A smaller region with its southern boundaries reaching Mamallapuram and Tirukazhukunram is an option. The other alternative under review is the delineation of a large area which would include Gummidipoondi, and portions of Tiruvallur and Kancheepuram districts.
The third option is a midsized region. In terms of organisation, either a separate and independent regional authority under which other planning authorities such as the CMDA would function could be decided or, alternatively, the CMDA itself could be asked to perform the regional planning role, said the sources.
Since 1974, an area encompassing 1,189 sq. km around the city has been designated as the Chennai Metropolitan Area (CMA) and the CMDA has been designated as the authority to plan the growth of the city and the area around it.
This model has been found inadequate since the areas outside the CMA are growing fast and they have not been sufficiently integrated with the metropolitan area. The recently released 2011 census data confirms that the population growth within the Chennai Corporation has slowed down while in the adjacent districts of Kancheepuram and Tiruvallur, it has substantially increased. Between 1991 and 2011, Chennai witnessed a decadal growth of 13 per cent, but between 2001 and 2011 it dropped to 6 per cent.
During the same period, population growth in Kancheepuram increased from 19 per cent to 39 per cent and Tiruvallur increased from 23 to 35 per cent.
In order to plan for balanced regional development, developing a larger road network, implementing an integrated transport plan and identifying a Chennai Mega Region have become necessary.
Some metropolitan cities which faced a similar situation have either expanded their planning areas or radically reconstituted their planning structure. Delhi was one of the earliest cities to implement the idea of a larger planning region.
A National Capital Region covering a total area of over 33,578 sq. km, and spread over three States and 15 districts was constituted in 1985. Hyderabad, which earlier had a metropolitan area of 1,860 sq.km for planning purposes, extended it to 7,100 sq.km in 2008.
Bangalore has delineated an area of 8,005 sq.km as its metropolitan region and has constituted a separate Bangalore Metropolitan Region Development Authority to oversee it.
Government sources say three kinds of planning regions are under consideration. A smaller region with its southern boundaries reaching Mamallapuram and Tirukazhukunram is an option. The other alternative under review is the delineation of a large area which would include Gummidipoondi, and portions of Tiruvallur and Kancheepuram districts.
The third option is a midsized region. In terms of organisation, either a separate and independent regional authority under which other planning authorities such as the CMDA would function could be decided or, alternatively, the CMDA itself could be asked to perform the regional planning role, said the sources.
Since 1974, an area encompassing 1,189 sq. km around the city has been designated as the Chennai Metropolitan Area (CMA) and the CMDA has been designated as the authority to plan the growth of the city and the area around it.
This model has been found inadequate since the areas outside the CMA are growing fast and they have not been sufficiently integrated with the metropolitan area. The recently released 2011 census data confirms that the population growth within the Chennai Corporation has slowed down while in the adjacent districts of Kancheepuram and Tiruvallur, it has substantially increased. Between 1991 and 2011, Chennai witnessed a decadal growth of 13 per cent, but between 2001 and 2011 it dropped to 6 per cent.
During the same period, population growth in Kancheepuram increased from 19 per cent to 39 per cent and Tiruvallur increased from 23 to 35 per cent.
In order to plan for balanced regional development, developing a larger road network, implementing an integrated transport plan and identifying a Chennai Mega Region have become necessary.
Some metropolitan cities which faced a similar situation have either expanded their planning areas or radically reconstituted their planning structure. Delhi was one of the earliest cities to implement the idea of a larger planning region.
A National Capital Region covering a total area of over 33,578 sq. km, and spread over three States and 15 districts was constituted in 1985. Hyderabad, which earlier had a metropolitan area of 1,860 sq.km for planning purposes, extended it to 7,100 sq.km in 2008.
Bangalore has delineated an area of 8,005 sq.km as its metropolitan region and has constituted a separate Bangalore Metropolitan Region Development Authority to oversee it.
Aakash $35 - $60 Tablet Price India -Aakash Cheapest Tablet PC - Rs. 1500 - Rs. 3000
Price - $35 - $60 - Rs. 1500 - Rs. 3000
Features - Specification:
- - Android 2.2 OS Operating System
- - 7 inch - 800x480 Touchscreen
- - Weight - 350 grams
- - 256 MB of RAM, 32 GB expandable memory slot
- - Power - 2-3 hours
- - Wi-Fi, GPRS Connectivity
- - 2 USB ports
Intraday Stock Trading Tips for 31 Oct 2011
Stock Trading Tips for 31 Oct 2011
| Scrip | Trigger | Price | Stop Loss | Target 1 |
|---|---|---|---|---|
| BHEL | BUY ABOVE | 330 | 327 | 334 |
| SELL BELOW | 324 | 327 | 320 | |
| HDFC | BUY ABOVE | 695 | 689 | 703 |
| SELL BELOW | 681 | 687 | 674 |
Housing Loan EMI Up by 24%
The latest increase of 0.25% in key policy rates by RBI will be mirrored by a
commensurate increase in lending rates.Housing loan borrowers have risen by 24% over the past one year.
The formula to calculate EMIs and then try to write a programme that calculates the EMIs for them. I find it particularly appalling that very few bother to figure it out for themselves, especially since it involves elementary algebra that most of us have surely learnt in high school. It either reflects the creeping sloth and sloppiness in our generation or the rote learning and regurgitating of formulae that our system of education seems to encourage. In any case, I attempt to show in this post how simple it really is to figure out how to calculate EMIs on your own and to hopefully encourage my fellow engineers into applying the basic mathematics they learn in school to real-life problems themselves instead of looking around to see if someone else has solved it for them.
For the sake of simplicity, assume that the loan is offered on a "monthly rest" basis. That is, the bank calculates the interest at the end of every month on the amount you still owe to the bank at the beginning of the month, adds it to the amount you already owe and then deducts your EMI from this to calculate the total amount you still owe to the bank at the beginning of the next month. Some banks offer loans on a "daily rest" basis, where the outstanding amount and the interest is recalculated every day, but you still pay back on a monthly basis. The older "annual rest" basis is no longer in use as far as I can tell. Note that it is easy to adapt the formula given here to the "daily rest" basis and that is, of course, left as an exercise for the reader.
Suppose you take on a loan for P Rupees, the tenure of the loan is n months (for example, n=240 for a 20-year loan), the monthly rate of interest is r (usually calculated by dividing the annual rate of interest quoted by the bank by 12, the number of months in a year, and dividing that by 100 as the rate is usually quoted as a percentage) and E Rupees is the EMI you have to pay every month. Let us use Pi to denote the amount you still owe to the bank at the end of the i-th month. At the very beginning of the tenure, i=0 and P0=P, the principal amount you took on as a loan.
At the end of the first month, you owe the bank the original amount P, the interest accrued at the end of the month r×P and you pay back E. In other words:
or to rewrite it slightly differently:
Similarly, at the end of the second month the amount you still owe to the bank is:
or substituting the value of P1 we calculated earlier:
and once again expanding it and rewriting it slightly differently:
where "xy" denotes "x raised to the power y" or "x multiplied by itself y times". To make this look slightly simpler, we substitute "(1 + r)" by "t" and now it looks like this:
Continuing in this fashion and calculating P3, P4, etc. we quickly see that Pi is given by:
At the end of n months (that is, at the end of the tenure of the loan), the total amount you owe to the bank should have become zero. In other words, Pn=0. This implies that:
which means that:
We can simplify this further by noticing that we have a geometric series of n terms here with a common ratio of t and a scale factor of 1. The sum of such a series is given by "(tn - 1)/(t - 1)", which we substitute in the above equation to yield:
which can be rewritten as:
which can again be rewritten by substituting the value of t back as "(1 + r)" as:
and this is the formula for calculating your EMI. This formula can also be rendered more clearly as:
Suppose you take a loan from a bank of 10,00,000 Rupees for 15 years at 8.5% annual rate of interest calculated on a monthly rest basis.
In that case, P = 10,00,000, n = 15×12 = 180 and r = (8.5/12)/100 = 0.0070833333. Putting these values into the formula given above gives us E = 9847.40 (approximately).
commensurate increase in lending rates.Housing loan borrowers have risen by 24% over the past one year.
The formula to calculate EMIs and then try to write a programme that calculates the EMIs for them. I find it particularly appalling that very few bother to figure it out for themselves, especially since it involves elementary algebra that most of us have surely learnt in high school. It either reflects the creeping sloth and sloppiness in our generation or the rote learning and regurgitating of formulae that our system of education seems to encourage. In any case, I attempt to show in this post how simple it really is to figure out how to calculate EMIs on your own and to hopefully encourage my fellow engineers into applying the basic mathematics they learn in school to real-life problems themselves instead of looking around to see if someone else has solved it for them.
For the sake of simplicity, assume that the loan is offered on a "monthly rest" basis. That is, the bank calculates the interest at the end of every month on the amount you still owe to the bank at the beginning of the month, adds it to the amount you already owe and then deducts your EMI from this to calculate the total amount you still owe to the bank at the beginning of the next month. Some banks offer loans on a "daily rest" basis, where the outstanding amount and the interest is recalculated every day, but you still pay back on a monthly basis. The older "annual rest" basis is no longer in use as far as I can tell. Note that it is easy to adapt the formula given here to the "daily rest" basis and that is, of course, left as an exercise for the reader.
Suppose you take on a loan for P Rupees, the tenure of the loan is n months (for example, n=240 for a 20-year loan), the monthly rate of interest is r (usually calculated by dividing the annual rate of interest quoted by the bank by 12, the number of months in a year, and dividing that by 100 as the rate is usually quoted as a percentage) and E Rupees is the EMI you have to pay every month. Let us use Pi to denote the amount you still owe to the bank at the end of the i-th month. At the very beginning of the tenure, i=0 and P0=P, the principal amount you took on as a loan.
At the end of the first month, you owe the bank the original amount P, the interest accrued at the end of the month r×P and you pay back E. In other words:
P1 = P + r×P - E
or to rewrite it slightly differently:
P1 = P×(1 + r) - E
Similarly, at the end of the second month the amount you still owe to the bank is:
P2 = P1×(1 + r) - E
or substituting the value of P1 we calculated earlier:
P2 = (P×(1 + r) - E)×(1 + r) - E
and once again expanding it and rewriting it slightly differently:
P2 = P×(1 + r)2 - E×((1 + r) + 1)
where "xy" denotes "x raised to the power y" or "x multiplied by itself y times". To make this look slightly simpler, we substitute "(1 + r)" by "t" and now it looks like this:
P2 = P×t2 - E×(1 + t)
Continuing in this fashion and calculating P3, P4, etc. we quickly see that Pi is given by:
Pi = P×ti - E×(1 + t + t2 + ... + ti-1)
At the end of n months (that is, at the end of the tenure of the loan), the total amount you owe to the bank should have become zero. In other words, Pn=0. This implies that:
Pn = P×tn - E×(1 + t + t2 + ... + tn-1) = 0
which means that:
P×tn = E×(1 + t + t2 + ... + tn-1)
We can simplify this further by noticing that we have a geometric series of n terms here with a common ratio of t and a scale factor of 1. The sum of such a series is given by "(tn - 1)/(t - 1)", which we substitute in the above equation to yield:
P×tn = E×(tn - 1)/(t - 1)
which can be rewritten as:
E = P×tn×(t - 1)/(tn - 1)
which can again be rewritten by substituting the value of t back as "(1 + r)" as:
E = P×r×(1 + r)n/((1 + r)n - 1)
and this is the formula for calculating your EMI. This formula can also be rendered more clearly as:
Suppose you take a loan from a bank of 10,00,000 Rupees for 15 years at 8.5% annual rate of interest calculated on a monthly rest basis.
In that case, P = 10,00,000, n = 15×12 = 180 and r = (8.5/12)/100 = 0.0070833333. Putting these values into the formula given above gives us E = 9847.40 (approximately).
Thursday 27 October 2011
Tamilnadu government hikes power of registration fees from Rs. 50 to Rs.10,000.
Tamilnadu government hikes power of attorney fees from Rs. 50 to Rs.10,000.
The Tamilnadu government has effected manifold increase in the registration fees in respect of agreements for the deposit of title deeds and lease deeds, besides the fee for registration of instrument of power of attorney.
In the case of title deeds, the ceiling on stamp duty has been revised from Rs. 5,000 to Rs. 25,000 and the cap on registration fee from Rs.1,000 to Rs. 5,000.
However, there is no change in the quantum of the duty and the fee which remain at 0.5 per cent and one per cent respectively.
According to Commercial Taxes and Registration Department, case of lease deeds, the maximum registration fee had been fixed at Rs. 20,000 instead of Rs. 5,000.
The existing registration fee of Rs. 50 prescribed for instruments of power of attorney to sell immovable properties had been hiked to Rs. 1,000 if the power was given to family members and Rs. 10,000 if the power was given to others, that is real agents.
In the case of title deeds, the ceiling on stamp duty has been revised from Rs. 5,000 to Rs. 25,000 and the cap on registration fee from Rs.1,000 to Rs. 5,000.
However, there is no change in the quantum of the duty and the fee which remain at 0.5 per cent and one per cent respectively.
An order issued by the Commercial Taxes and Registration Department on Monday stated that in the case of lease deeds, the maximum registration fee had been fixed at Rs. 20,000 instead of Rs. 5,000.
The existing registration fee of Rs. 50 prescribed for instruments of power of attorney to sell immovable properties had been hiked to Rs. 1,000 if the power was given to family members and Rs. 10,000 if the power was given to others.
The hike was expected to net Rs. 300 crore more annually.
As for the revision in sales tax rates, the government expected an annual additional revenue of Rs. 3,900 crore, of which the increase in the rate of Value Added Tax from four per cent to five per cent would fetch around Rs. 1,300 crore followed by Rs. 1,100 crore from the increase in the VAT rate on commodities from 12.5 per cent to 14.5 per cent. An amount of Rs. 550 crore each was likely to be generated by the move to bring textile and textile products under the VAT net of five per cent and the reduction of exemption of turn over limit from Rs. 50 crore to Rs. 5 crore for edible oil dealers. The levy of 14.5 per cent on LCD panels/LED panels and other categories equipment would provide Rs. 130 crore.
"The government's move to hike fees, especially those for power of attorney, was to ensure that real estate brokers did not change power of attorney several times for a single piece of land and also to prevent land grabbing" said registration department sources.
In Delhi, power of attorney for outsiders should be discouraged and banned.
Mr. Dharmendra Pratap Yadav, Inspector General of Registration Said, ''In 2010-2011, more than 3 lakh power of attorney transactions had been carried out. This fetched us only Rs 1.75 crore. The hike in fees would generate more than hundred-fold revenue. However, there would be no increase in guideline value.""
According Mr. Dharmendra Pratap Yadav, In 2009-2010, the total number of documents registered was 27,31,026, from which the government earned more than 3,000 crore. In 2010-2011, more than 30 lakh documents were registered, from which the government earned more than 5,000 crore"With this, the government hopes to generate additional revenue of Rs 500 crore every year.
The Tamilnadu government has effected manifold increase in the registration fees in respect of agreements for the deposit of title deeds and lease deeds, besides the fee for registration of instrument of power of attorney.
In the case of title deeds, the ceiling on stamp duty has been revised from Rs. 5,000 to Rs. 25,000 and the cap on registration fee from Rs.1,000 to Rs. 5,000.
However, there is no change in the quantum of the duty and the fee which remain at 0.5 per cent and one per cent respectively.
The existing registration fee of Rs. 50 prescribed for instruments of power of attorney to sell immovable properties had been hiked to Rs. 1,000 if the power was given to family members and Rs. 10,000 if the power was given to others, that is real agents.
In the case of title deeds, the ceiling on stamp duty has been revised from Rs. 5,000 to Rs. 25,000 and the cap on registration fee from Rs.1,000 to Rs. 5,000.
However, there is no change in the quantum of the duty and the fee which remain at 0.5 per cent and one per cent respectively.
An order issued by the Commercial Taxes and Registration Department on Monday stated that in the case of lease deeds, the maximum registration fee had been fixed at Rs. 20,000 instead of Rs. 5,000.
The existing registration fee of Rs. 50 prescribed for instruments of power of attorney to sell immovable properties had been hiked to Rs. 1,000 if the power was given to family members and Rs. 10,000 if the power was given to others.
The hike was expected to net Rs. 300 crore more annually.
As for the revision in sales tax rates, the government expected an annual additional revenue of Rs. 3,900 crore, of which the increase in the rate of Value Added Tax from four per cent to five per cent would fetch around Rs. 1,300 crore followed by Rs. 1,100 crore from the increase in the VAT rate on commodities from 12.5 per cent to 14.5 per cent. An amount of Rs. 550 crore each was likely to be generated by the move to bring textile and textile products under the VAT net of five per cent and the reduction of exemption of turn over limit from Rs. 50 crore to Rs. 5 crore for edible oil dealers. The levy of 14.5 per cent on LCD panels/LED panels and other categories equipment would provide Rs. 130 crore.
"The government's move to hike fees, especially those for power of attorney, was to ensure that real estate brokers did not change power of attorney several times for a single piece of land and also to prevent land grabbing" said registration department sources.
In Delhi, power of attorney for outsiders should be discouraged and banned.
Mr. Dharmendra Pratap Yadav, Inspector General of Registration Said, ''In 2010-2011, more than 3 lakh power of attorney transactions had been carried out. This fetched us only Rs 1.75 crore. The hike in fees would generate more than hundred-fold revenue. However, there would be no increase in guideline value.""
According Mr. Dharmendra Pratap Yadav, In 2009-2010, the total number of documents registered was 27,31,026, from which the government earned more than 3,000 crore. In 2010-2011, more than 30 lakh documents were registered, from which the government earned more than 5,000 crore"With this, the government hopes to generate additional revenue of Rs 500 crore every year.
Tamil Nadu Govt. planing to rise Guideline Value every year
What is Guideline Value? How to ascertain?
Guideline Value of any land should truly reflect the market value. Guideline values have been fixed for all the areas in the State. Well established residential areas have only street based guideline values.
The guideline values have been fixed for each survey number. This will remain unchanged till the next revision. Higher value registration will not have not have automatic adoption for subsequent registration.
This guideline value help the registering officer in the detection of primacy under valuation of property. In most of the places, the guideline value is lower than the prevailing market value. In a few places, the guideline value may be unreasonably higher than the market value.
Such cases should be brought to the notice of the Inspector General of Registrations for correction of anomalies. There is a committee at State level which goes into such issues.
Tamil Nadu Govt. planing rise of Guideline Value every year
Guideline value is an indicator of the market value of properties. In Tamil Nadu Guideline values were last revised in 2007 and the previous revision was in 2003.
The Tamil Nadu government’s treasury received Rs 5,020 crore through stamp duty and registration charges during the last 2010-11 fiscal, and two third of this sum comes from the registration of properties alone.
In neighboring Karnataka and Andhra Pradesh states had the guideline value been revised every year to be on par with market rates as is done. The revenues would have been two or even three times more.
Last four years as many as many places in state land cost increase two or even three times more. So, government is planning to increase the Guideline Value. Recently one review meeting held at Chennai. At this meeting discuss many issues.
With the new guideline values in place, the Tamil Nadu government expects to raise another Rs 3,000 crore, that is total revenue expect is Rs. 5,000 crore.
Valuation sub-committees set up for the purpose of estimating and revising the guideline value in districts are working with the revenue department and local bodies at the field level. Led by the district collector, the sub-committees consisting of staff from local civic bodies and revenue and registration departments have started surveys in all the 32 districts of the state. As many as 578 sub-registrars across the state are supporting the exercise.
The state government is all set to announce new guideline values for the 4 crore survey numbers in villages and 1.89 lakh streets in corporations, municipalities and town penchants in the state.
The field survey to ascertain market values must be completed by 2011 December, as per schedule.
On completion of assessment, the valuation committee will invite suggestions and objections from the public at least twice, before making the new guideline value final.
The guideline values have been fixed for each survey number. This will remain unchanged till the next revision. Higher value registration will not have not have automatic adoption for subsequent registration.
This guideline value help the registering officer in the detection of primacy under valuation of property. In most of the places, the guideline value is lower than the prevailing market value. In a few places, the guideline value may be unreasonably higher than the market value.
Such cases should be brought to the notice of the Inspector General of Registrations for correction of anomalies. There is a committee at State level which goes into such issues.
Tamil Nadu Govt. planing rise of Guideline Value every year
Guideline value is an indicator of the market value of properties. In Tamil Nadu Guideline values were last revised in 2007 and the previous revision was in 2003.
The Tamil Nadu government’s treasury received Rs 5,020 crore through stamp duty and registration charges during the last 2010-11 fiscal, and two third of this sum comes from the registration of properties alone.
In neighboring Karnataka and Andhra Pradesh states had the guideline value been revised every year to be on par with market rates as is done. The revenues would have been two or even three times more.
Last four years as many as many places in state land cost increase two or even three times more. So, government is planning to increase the Guideline Value. Recently one review meeting held at Chennai. At this meeting discuss many issues.
With the new guideline values in place, the Tamil Nadu government expects to raise another Rs 3,000 crore, that is total revenue expect is Rs. 5,000 crore.
Valuation sub-committees set up for the purpose of estimating and revising the guideline value in districts are working with the revenue department and local bodies at the field level. Led by the district collector, the sub-committees consisting of staff from local civic bodies and revenue and registration departments have started surveys in all the 32 districts of the state. As many as 578 sub-registrars across the state are supporting the exercise.
The state government is all set to announce new guideline values for the 4 crore survey numbers in villages and 1.89 lakh streets in corporations, municipalities and town penchants in the state.
The field survey to ascertain market values must be completed by 2011 December, as per schedule.
On completion of assessment, the valuation committee will invite suggestions and objections from the public at least twice, before making the new guideline value final.
Mortgage Rates Today for the Top Lenders on 26 Oct 2011
Current mortgage rates today have mostly decreased this morning after the last 5 business days or so we have seen mainly incremental increases daily from the top lenders we study. All changes and current rates will be listed below for your mortgage shopping convenience.
Both regular and FHA 30-year fixed loans and 5-year ARMs all decreased at Wells Fargo this morning under their home purchase program. Regular 30-year fixed loans and FHA 5-year ARMs decreased under their refinance program.
30-year fixed loans and 7-year ARMs decreased at Chase under their home purchase program. 30 and 15-year fixed loans decreased along with 5 and 7-year ARMs under their refinance program.
At Bank of America, 30-year fixed rates and 7-year ARMs decreased as well under their home purchase program. It appears that refinance rates remained the same.
Regular and FHA 30, and regular 20 and 15-year fixed rates decreased along with 3 and 5-year ARMs at US Bank.
Wells Fargo Home Purchase Rates
30-year fixed rates 4.250%
FHA 30-year fixed rates 4.000%
15-year fixed rates 3.500%
5-year Arms 2.500%
FHA 5-Year ARMs 3.000%
Wells Fargo Refinance Rates
30-year fixed rates 4.250%
FHA 30-year fixed rates 4.000%
15-year fixed rates 3.500%
5-year Arms 2.625%
FHA 5-Year ARMs 2.875%
Chase Home Purchase Rates
30-year fixed rates 3.875%
15-year fixed rates 3.250%
7-year ARMs 2.875%
5-year ARMs 2.500%
Chase Refinance Rates
30-year fixed rates 4.125%
15-year fixed rates 3.500%
7-year ARMs 3.125%
5-year ARMs 2.625%
Bank of America Home Purchase Rates
30-year fixed rates 4.125%
15-year fixed rates 3.375%
7-year ARMs 2.875%
5-year ARMs 2.500%
Bank of America Refinance Rates
30-year fixed rates 4.375%
15-year fixed rates 3.625%
7-year ARMs 3.125%
5-year ARMs 2.750%
US Bank Fixed Rate Mortgages
30-year fixed rates 3.750% – 4.250%
20-year fixed rates 3.750% – 4.000%
15-year fixed rates 3.250 – 3.625%
10-year fixed rates 3.250% -3.375%
FHA 30-year fixed rates 3.750% – 4.000%
FHA 15-year fixed rates 3.375% – 3.750%
ARMs
3-year ARMs 2.375% – 2.875%
5-year ARMs 2.625%- 3.000%
Places: Continental United States Alaska, Hawaii, Guam
Units General Higher Cost General Higher Cost
1 $417,000 $729,750 $625,500 $938,250
2 $533,850 $934,200 $800,775 $1,201,150
3 $645,300 $1,129,250 $967,950 $1,451,925
4 $801,950 $1,403,400 $1,202,925 $1,804,375
The limit may be lower for a specific high-cost area; use the Loan Limit Look-Up Table above to see limits by location. These limits are the same as the 2010 high-cost area loan limits and apply to all Loans originated on or before September 30, 2011. Loans originated on or after October 1, 2011, will use the “permanent” high-cost area loan limits established by FHFA under a formula of 115% of the 2010 median home price, up to a maximum of $625,500 for a 1-unit property in the continental U.S.
Both regular and FHA 30-year fixed loans and 5-year ARMs all decreased at Wells Fargo this morning under their home purchase program. Regular 30-year fixed loans and FHA 5-year ARMs decreased under their refinance program.
At Bank of America, 30-year fixed rates and 7-year ARMs decreased as well under their home purchase program. It appears that refinance rates remained the same.
Regular and FHA 30, and regular 20 and 15-year fixed rates decreased along with 3 and 5-year ARMs at US Bank.
Wells Fargo Home Purchase Rates
30-year fixed rates 4.250%
FHA 30-year fixed rates 4.000%
15-year fixed rates 3.500%
5-year Arms 2.500%
FHA 5-Year ARMs 3.000%
Wells Fargo Refinance Rates
30-year fixed rates 4.250%
FHA 30-year fixed rates 4.000%
15-year fixed rates 3.500%
5-year Arms 2.625%
FHA 5-Year ARMs 2.875%
Chase Home Purchase Rates
30-year fixed rates 3.875%
15-year fixed rates 3.250%
7-year ARMs 2.875%
5-year ARMs 2.500%
Chase Refinance Rates
30-year fixed rates 4.125%
15-year fixed rates 3.500%
7-year ARMs 3.125%
5-year ARMs 2.625%
Bank of America Home Purchase Rates
30-year fixed rates 4.125%
15-year fixed rates 3.375%
7-year ARMs 2.875%
5-year ARMs 2.500%
Bank of America Refinance Rates
30-year fixed rates 4.375%
15-year fixed rates 3.625%
7-year ARMs 3.125%
5-year ARMs 2.750%
US Bank Fixed Rate Mortgages
30-year fixed rates 3.750% – 4.250%
20-year fixed rates 3.750% – 4.000%
15-year fixed rates 3.250 – 3.625%
10-year fixed rates 3.250% -3.375%
FHA 30-year fixed rates 3.750% – 4.000%
FHA 15-year fixed rates 3.375% – 3.750%
ARMs
3-year ARMs 2.375% – 2.875%
5-year ARMs 2.625%- 3.000%
Places: Continental United States Alaska, Hawaii, Guam
Units General Higher Cost General Higher Cost
1 $417,000 $729,750 $625,500 $938,250
2 $533,850 $934,200 $800,775 $1,201,150
3 $645,300 $1,129,250 $967,950 $1,451,925
4 $801,950 $1,403,400 $1,202,925 $1,804,375
The limit may be lower for a specific high-cost area; use the Loan Limit Look-Up Table above to see limits by location. These limits are the same as the 2010 high-cost area loan limits and apply to all Loans originated on or before September 30, 2011. Loans originated on or after October 1, 2011, will use the “permanent” high-cost area loan limits established by FHFA under a formula of 115% of the 2010 median home price, up to a maximum of $625,500 for a 1-unit property in the continental U.S.
The drama marks a new phase in the continent's banking crisis.
The world's oldest bank, Siena-based Banca Monte dei Paschi di Siena SpA, is now caught in the storm. European leaders are expected to force Monte dei Paschi to raise €2 billion, or about $2.8 billion, or more in new capital, analysts say. The bank's troubles are reverberating through the region: The powerful foundation that owns half the bank is drastically cutting back charitable donations, retreating from its role as a modern-day Medici.
The headquarters of the Monte dei Paschi Foundation
"We can't be the city's ATM any longer," said Gabriello Mancini, the Monte dei Paschi Foundation's chairman, in an interview in his 13th-century headquarters building overlooking Siena's famous Piazza del Campo. "It could cause some problems because some groups got used to having our support." The foundation has cut back donations across Tuscany by 80% in the past three years. Those taking a hit range from a horse race run through the narrow streets of Siena to a biotech facility researching cures for neurological diseases.
The drama marks a new phase in the continent's banking crisis.
Irish banks ran into trouble due to reckless real-estate lending. Greek banks have been pummeled by their country's economic implosion. French banks are paying the price for their boom-time expansions into countries like Greece.
Italian banks, by contrast, are in trouble for what once seemed like a conservative investment: owning Italian government debt.
The country's top five lenders were sitting on €164 billion of Italian sovereign debt at the end of last year—nearly double the capital they were holding to absorb sudden losses, according to recent European "stress tests." Monte dei Paschi was the most exposed: It had €32.5 billion of Italian government debt, more than four times the size of its €7.1 billion capital cushion.
The three major bond-rating agencies this month downgraded the banks, including Monte dei Paschi. The banks have endured sharp stock selloffs and struggled to access funding markets.
The bank's capital cushion hovered just above 5% of its risk-adjusted assets, below the bank's target level of 7%.
In March 2009, as some of the world's largest banks teetered, Monte dei Paschi turned to the Italian government for help. It requested a €1.9 billion infusion from the government and agreed to pay about €160 million a year in interest.
The headquarters of the Monte dei Paschi Foundation
"We can't be the city's ATM any longer," said Gabriello Mancini, the Monte dei Paschi Foundation's chairman, in an interview in his 13th-century headquarters building overlooking Siena's famous Piazza del Campo. "It could cause some problems because some groups got used to having our support." The foundation has cut back donations across Tuscany by 80% in the past three years. Those taking a hit range from a horse race run through the narrow streets of Siena to a biotech facility researching cures for neurological diseases.
Irish banks ran into trouble due to reckless real-estate lending. Greek banks have been pummeled by their country's economic implosion. French banks are paying the price for their boom-time expansions into countries like Greece.
Italian banks, by contrast, are in trouble for what once seemed like a conservative investment: owning Italian government debt.
The country's top five lenders were sitting on €164 billion of Italian sovereign debt at the end of last year—nearly double the capital they were holding to absorb sudden losses, according to recent European "stress tests." Monte dei Paschi was the most exposed: It had €32.5 billion of Italian government debt, more than four times the size of its €7.1 billion capital cushion.
The three major bond-rating agencies this month downgraded the banks, including Monte dei Paschi. The banks have endured sharp stock selloffs and struggled to access funding markets.
The bank's capital cushion hovered just above 5% of its risk-adjusted assets, below the bank's target level of 7%.
In March 2009, as some of the world's largest banks teetered, Monte dei Paschi turned to the Italian government for help. It requested a €1.9 billion infusion from the government and agreed to pay about €160 million a year in interest.
The 20 best U.S. cities to trick-or-treat
eal-estate website Zillow ranked the 20 best U.S. cities to trick-or-treat in based on four equally-weighted variables: Zillow’s Home Price Index, population density, the site’s “Walk Score” (a measure of amenities within walking distance) and local crime data. According to Zillow, the list “represents cities that will provide the most candy, with the least walking and safety risks.”
San Francisco took the top spot, up from No. 2 last year, followed by Boston, Honolulu, Seattle and Chicago.
Zillow 2011 Trick-or-Treat Index *
San Francisco
Boston
Honolulu
Seattle
Chicago
San Jose, Calif.
Washington
Los Angeles
Philadelphia
Portland, Ore.
Minneapolis
Pittsburgh
San Diego
Cleveland
Miami
Denver
Milwaukee
Virginia Beach, Va.
Baltimore
Albuquerque, N.M.
* Courtesy of Zillow
San Francisco took the top spot, up from No. 2 last year, followed by Boston, Honolulu, Seattle and Chicago.
Zillow 2011 Trick-or-Treat Index *
San Francisco
Boston
Honolulu
Seattle
Chicago
San Jose, Calif.
Washington
Los Angeles
Philadelphia
Portland, Ore.
Minneapolis
Pittsburgh
San Diego
Cleveland
Miami
Denver
Milwaukee
Virginia Beach, Va.
Baltimore
Albuquerque, N.M.
* Courtesy of Zillow
House Resales Drop
Sales of previously occupied house in the U.S. fell slightly last month, a sign of continuing weakness in a depressed part of the economy.
Existing-house sales decreased by 3.0% in September from a month earlier to a seasonally adjusted annual rate of 4.91 million, the National Association of Realtors said Thursday. August's sales pace was revised upward to 5.06 million per year.
Economists surveyed by Dow Jones Newswires had expected home sales to fall by 2.6% to an annual rate of 4.90 million.
The market is "in a holding pattern. It's not breaking out," said Lawrence Yun, the trade group's chief economist.
Sales were up 11.3% from the same month a year earlier. The median sales price was $165,400, down 3.5% from $171,400 a year earlier.
The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply at the current sales pace, compared with a healthy level of about six months. Foreclosures and other distressed properties represented about 30% of sales, the Realtors group said.
More than five years after the housing bubble started to burst,the housing market remains a heavy burden on the economy.
Existing-house sales decreased by 3.0% in September from a month earlier to a seasonally adjusted annual rate of 4.91 million, the National Association of Realtors said Thursday. August's sales pace was revised upward to 5.06 million per year.
Economists surveyed by Dow Jones Newswires had expected home sales to fall by 2.6% to an annual rate of 4.90 million.
Sales were up 11.3% from the same month a year earlier. The median sales price was $165,400, down 3.5% from $171,400 a year earlier.
The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply at the current sales pace, compared with a healthy level of about six months. Foreclosures and other distressed properties represented about 30% of sales, the Realtors group said.
More than five years after the housing bubble started to burst,the housing market remains a heavy burden on the economy.
Restringing the Housing HARP
Such transfers have been the norm since the Federal Reserve instituted its zero-interest-rate policy in late 2008—shifting funds away from the likes of depositors, bondholders and pension funds to debtors. The latest iteration came Monday, when the Federal Housing Finance Agency unveiled changes to a program meant to make it easier for underwater homeowners who are current on payments to refinance into a lower-rate mortgage.
The thinking is that this will reduce defaults. Or as FHFA said, "Such refinances bring benefits to borrowers, to housing markets, and taxpayers."
Missing from that winners' list:
investors who finance housing markets by purchasing mortgage-backed bonds. They will fund this new effort. Here is how: As homeowners refinance, investors who bought mortgage bonds will be given back their money and will have little option but to reinvest at far lower yields. The transfer is the difference in yield.
Just how big that will be isn't clear as it is tough to tell how effective the program will be. The original Home Affordable Refinance Program, or HARP, led to refinancings by 894,000 homeowners in about two years. Estimates for how many borrowers could now take part range from 500,000 to three million, while FHFA said it is "very difficult to project the number of mortgages that may be refinanced." Some mortgage bonds traded lower Monday on news of the plan.
Granted, prepayment risk is inherent to mortgage bonds. There is also likely to be little sympathy for bondholders having to give up money to shore up housing. But that ignores that the government is picking winners and losers. Effectively, it is deciding some losses on some things are acceptable, say on 401(k) retirement plans, yet aren't on others, namely housing.
The government also potentially undermines its own effort to create a housing-finance market independent of Fannie and Freddie. Many mortgage investors may choose to reinvest elsewhere, ultimately shrinking the pool of lenders available to fund that market. In the short term, the Fed may well take their place. That isn't the basis, though, for a functioning mortgage market underpinned by private capital.
Another unsettling wrinkle: The FHFA is adding an incentive for borrowers to refinance into shorter-maturity mortgages. But in many cases, this will mean a borrower's monthly payment, including principal repayment, won't decline. It may actually rise. That undermines the notion that these borrowers are unable to meet monthly payments and need government assistance.
Banks may also benefit depending on how FHFA decides to limit the risk that they could be forced under some circumstances to repurchase shoddily underwritten mortgages.
The biggest issue, though, isn't necessarily with HARP or similar programs. It is that both parties in Washington are studiously avoiding any real effort to overhaul housing finance and decide what to do about Fannie and Freddie.
Obama Expands Mortgage Aid
The federal government's revamped mortgage-refinancing program could allow more than a million borrowers to take advantage of falling interest rates, even if the value of their homes has plummeted.
economists said more action may be needed to stabilize the ailing housing market.
The Obama administration has been criticized for housing-relief programs that failed to meet announced goals, and declined Monday to provide estimates of how many borrowers might be helped by the latest effort. Analysts at Barclays Capital estimate that between two million and three million borrowers could be eligible under the revamp.
Loans that exceed the current 125% loan-to-value limit won't be eligible to refinance until early next year, officials said.
Other homeowners will still be left out, including those whose mortgages aren't guaranteed by Fannie and Freddie and those who took out mortgages in the past 2½ years.
Mr. Obama unveiled HARP one month into his presidency. But so far, only 894,000 borrowers have used it, of which just 70,000 are significantly underwater, or owe more than their homes are worth.
economists said more action may be needed to stabilize the ailing housing market.
Loans that exceed the current 125% loan-to-value limit won't be eligible to refinance until early next year, officials said.
Other homeowners will still be left out, including those whose mortgages aren't guaranteed by Fannie and Freddie and those who took out mortgages in the past 2½ years.
Mr. Obama unveiled HARP one month into his presidency. But so far, only 894,000 borrowers have used it, of which just 70,000 are significantly underwater, or owe more than their homes are worth.
Tuesday 25 October 2011
1,900 banks out of the loop for UK study visa
Britain on Tuesday published a list of nearly 1,900 banks in India, most of them cooperative, whose financial statements will not be accepted for student visa purposes, a move that is set to affect thousands of Indian students wanting to study there.
The new list has just 85 Indian banks whose statements will be accepted.
Education consultants from India, however, have welcomed the move saying it will give genuine students a fair chance, and, to a great extent, will be successful in cracking the reported business of illegal immigration by agents in India.
According to information provided by British Council, in 2010, there were about 51,000 Indian students studying in the UK.
The new list has just 85 Indian banks whose statements will be accepted.Education consultants from India, however, have welcomed the move saying it will give genuine students a fair chance, and, to a great extent, will be successful in cracking the reported business of illegal immigration by agents in India.
According to information provided by British Council, in 2010, there were about 51,000 Indian students studying in the UK.
Home loans may get costlier:(RBI) repo rate hike by 25 basis points
The Reserve Bank of India’s (RBI) repo rate hike by 25 basis points has put a damper on the real estate sector’s Diwali celebrations. Repo rate is the rate at which banks borrow money from the RBI.
Paras Gundecha, president of the Maharashtra Chamber of Housing Industry, said the fresh hike would cripple the real estate industry.
“Real estate contributes to hundreds of other industries; it serves as a backbone of the economy,” he said. “The hike will impact this core industry negatively.”
Nowadays, the demand is sluggish because of inflation and high interest rates on home loans, Gundecha said. “This hike will affect the end-user — the customer who is already burdened with high interest rates.”
Industry experts feel the recent spate of hikes has proved to be counterproductive. “This move will have a cost-push impact rather than acting as an inflation-control measure,” Lalit Kumar Jain, national president of the Confederation of Real Estate Developers Associations of India (CREDAI), said. The interest rates are bound to go up and demands will further slip, Jain said.
There is a deceleration in economic growth and inflation has constantly been on the rise despite increasing the interest rates over the past couple of months. “Developers are deeply in debt.
They were looking forward to the festive season for sales to improve,” Anuj Puri, chairman and country head of Jones Lang LaSalle India, said. “This hike will lead to an increase in the home loan interest rates. Sales will naturally go down even further. Puri said the absorption rate in residential market would remain low and there would be few new launches. Capital values too would decline. “In fact, the RBI should rethink this strategy to combat inflation,” he said.
Paras Gundecha, president of the Maharashtra Chamber of Housing Industry, said the fresh hike would cripple the real estate industry.
Nowadays, the demand is sluggish because of inflation and high interest rates on home loans, Gundecha said. “This hike will affect the end-user — the customer who is already burdened with high interest rates.”
Industry experts feel the recent spate of hikes has proved to be counterproductive. “This move will have a cost-push impact rather than acting as an inflation-control measure,” Lalit Kumar Jain, national president of the Confederation of Real Estate Developers Associations of India (CREDAI), said. The interest rates are bound to go up and demands will further slip, Jain said.
There is a deceleration in economic growth and inflation has constantly been on the rise despite increasing the interest rates over the past couple of months. “Developers are deeply in debt.
They were looking forward to the festive season for sales to improve,” Anuj Puri, chairman and country head of Jones Lang LaSalle India, said. “This hike will lead to an increase in the home loan interest rates. Sales will naturally go down even further. Puri said the absorption rate in residential market would remain low and there would be few new launches. Capital values too would decline. “In fact, the RBI should rethink this strategy to combat inflation,” he said.
L&T Share Result Review
Larsen and Toubro (L&T) posted good set of numbers for 2Q FY 2012, which were above expectations mainly on account of good top-line performance.
Order Book:
On the order booking front, L&T has an order backlog of Rs. 1,42,185 cr as of 2Q FY 2012. Order inflow for the quarter stood at RS. 16,096 cr (Rs. 20,464 cr), led by the infrastructure segment (31%). The company has significantly cut its guidance of order inflow from 15-20% to 5% for FY 2012, mainly to factor in general slowdown faced by the sector; but it has maintained revenue growth guidance of 25% for the
Buy View :
We believe L&T is best placed to benefit from the gradual recovery in the capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to its peers.
Further, at current valuations, after an under performance of 16.5% to BSE Sensex over the last three months, we believe most of the negatives are factored in and, hence, we maintain Buy view on the stock with a revised target price of Rs.1,714 (Rs.1,857). We have assigned lowered PE multiple of 18x (earlier 19x) to
L&T parent’s FY 2013 E EPS of Rs.76.4 and its subsidiaries to factor in macro headwinds faced by the sector and economy.
Order Book:On the order booking front, L&T has an order backlog of Rs. 1,42,185 cr as of 2Q FY 2012. Order inflow for the quarter stood at RS. 16,096 cr (Rs. 20,464 cr), led by the infrastructure segment (31%). The company has significantly cut its guidance of order inflow from 15-20% to 5% for FY 2012, mainly to factor in general slowdown faced by the sector; but it has maintained revenue growth guidance of 25% for the
whole year, which we believe is aggressive.
Buy View :
We believe L&T is best placed to benefit from the gradual recovery in the capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to its peers.
Further, at current valuations, after an under performance of 16.5% to BSE Sensex over the last three months, we believe most of the negatives are factored in and, hence, we maintain Buy view on the stock with a revised target price of Rs.1,714 (Rs.1,857). We have assigned lowered PE multiple of 18x (earlier 19x) to
L&T parent’s FY 2013 E EPS of Rs.76.4 and its subsidiaries to factor in macro headwinds faced by the sector and economy.
Monday 24 October 2011
RBI to raise rates 25 basis points on Oct. 25 2011
Of those polled, 17 expect the Reserve Bank of India to increase the key lending rate by 25 basis points on Oct. 25, while 13 expect it to hold the rate.
The median forecast is roughly in line with estimates in a smaller poll conducted immediately after the RBI raised rates in mid-September and indicated more was to follow. Since then, global and domestic indicators have pointed to weakening economic conditions.
A rate increase in India would be the 13th in 19 months and would take the repo rate to 8.50 percent.
India's inflation barely budged in September at 9.7 percent, staying above 9 percent for the 10th straight month, driven by higher fuel and power prices.
"While clearly there are signs that globally the situation is extremely uncertain and there is some amount of headwind on domestic growth, the RBI has been very forthright in maintaining that it wants to control inflation," said Sujan Hajra, chief economist at Anand Rathi Securities."From that perspective, inflation control will remain RBI's key objective."
While other central banks are easing monetary policy or considering doing so, the RBI has been among most aggressive globally and is reluctant to press the pause button yet amid sticky inflation. For a take a look on other central banks see:
The RBI last week reiterated that controlling inflation remains a priority."We are aware that some central banks in Asia and some outside Asia have reversed...Those circumstances are quite different from ours," RBI Governor Subbarao had said last week.
Worries over the slowdown in advanced economies and slowing growth at home is expected to prompt the RBI to pause in its tightening cycle after October, analysts said.
The median estimate for the repo rate at end-June 2012 is 25 basis points lower at 8.25 percent, compared with the mid-September snap poll.
Of 23 respondents, 18 said the RBI's monetary tightening thus far has been appropriate, while four said less aggressive tightening is needed, and one called for a more aggressive stance.
A rate increase in India would be the 13th in 19 months and would take the repo rate to 8.50 percent.
India's inflation barely budged in September at 9.7 percent, staying above 9 percent for the 10th straight month, driven by higher fuel and power prices.
"While clearly there are signs that globally the situation is extremely uncertain and there is some amount of headwind on domestic growth, the RBI has been very forthright in maintaining that it wants to control inflation," said Sujan Hajra, chief economist at Anand Rathi Securities."From that perspective, inflation control will remain RBI's key objective."
While other central banks are easing monetary policy or considering doing so, the RBI has been among most aggressive globally and is reluctant to press the pause button yet amid sticky inflation. For a take a look on other central banks see:
The RBI last week reiterated that controlling inflation remains a priority."We are aware that some central banks in Asia and some outside Asia have reversed...Those circumstances are quite different from ours," RBI Governor Subbarao had said last week.
Worries over the slowdown in advanced economies and slowing growth at home is expected to prompt the RBI to pause in its tightening cycle after October, analysts said.
The median estimate for the repo rate at end-June 2012 is 25 basis points lower at 8.25 percent, compared with the mid-September snap poll.
Of 23 respondents, 18 said the RBI's monetary tightening thus far has been appropriate, while four said less aggressive tightening is needed, and one called for a more aggressive stance.
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