Brokerage Radar: CLSA's India strategy & realty outlook
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CLSA INDIA STRATEGY
>> Govt follow-up measures unlikely to give big economic push>> Demand improvement measures for real estate have been lacking and that is a source of disappointment
>> Govt has continued to refrain from any significant fiscal support of the economy
>> Upcoming GST council meeting on the 20th will gain importance
>> Govt has continued to refrain from any significant fiscal support of the economy
>> Upcoming GST council meeting on the 20th will gain importance
2/3
CLSA ON PROPERTY
>> Strong demand pushes vacancies lower and rents higher>> Strong office demand in 1H
>> Occupancy low and rent rising
>> Disciplined supply rise likely from here on
>> Select micro-market vacancies are sub-5% and rent is up 10%-plus YoY
>> All-time high rentals coinciding with cycle-low cap rates
>> Could lead developers to favour commercial over residential
>> Occupancy low and rent rising
>> Disciplined supply rise likely from here on
>> Select micro-market vacancies are sub-5% and rent is up 10%-plus YoY
>> All-time high rentals coinciding with cycle-low cap rates
>> Could lead developers to favour commercial over residential
3/3
RBI ON SMALL FINANCE BANKS
>> Draft framework identical to old; MFIFCs and payment banks may seek
>> Objective of the new licenses is similar to past licenses: to provide savings vehicles and access to loans for the under-served segments
>> Licenses can be awarded to local individuals and businesses, but large corporate houses will not be allowed to apply
>> Capital levels have been raised from Rs1bn to Rs2bn; and a minimum promoter holding of 40% for 10 years
>> SFBs will need to be listed within three years of their net worth reaching Rs5bn
>> Believes that micro-finance companies as well as NBFCs focussed on lending to small borrowers will apply as this will provide them access to stronger sources of deposits and liquidity
>> Objective of the new licenses is similar to past licenses: to provide savings vehicles and access to loans for the under-served segments
>> Licenses can be awarded to local individuals and businesses, but large corporate houses will not be allowed to apply
>> Capital levels have been raised from Rs1bn to Rs2bn; and a minimum promoter holding of 40% for 10 years
>> SFBs will need to be listed within three years of their net worth reaching Rs5bn
>> Believes that micro-finance companies as well as NBFCs focussed on lending to small borrowers will apply as this will provide them access to stronger sources of deposits and liquidity