Real News‎ > ‎2014‎ > ‎March 2014‎ > ‎

3rd March 2014

Global Economy & Global Real Estate

UBS Wealth, Templeton buy China property firms

They cite record low valuations amid weak sentiment

Source: Business Times / China

[SHANGHAI] The rout in China developers that sent valuations to record lows is spurring UBS Wealth Management and Templeton Emerging Markets Group to say it's time to buy.

While some investors are concerned that profit growth at developers will slow as banks curtail lending, UBS Wealth's Kelvin Tay says that tighter credit will encourage more disciplined spending and prove beneficial for the industry. Templeton is buying real estate companies with lower debt levels and projects in larger cities such as Shanghai, where house prices climbed 18 per cent last month from a year earlier.

The Shanghai Property Index has fallen 12 per cent this year as borrowing costs rise and China's local governments take steps to rein in home values. That left the gauge of developers valued at 1.1 times net assets, the cheapest since Bloomberg began tracking the data in 1998 and a record 25 per cent discount to the MSCI All-Country World Real Estate Index.

"We found a couple of these very good, strong property companies focused on very key markets and we have invested in them," Dennis Lim, a money manager at Templeton who helps oversee more than US$50 billion in emerging markets, said in an interview last Thursday. "Everyone talks about a housing bubble in China but it's not one homogeneous country."

-From Shanghai, China

India's Dec quarter GDP up a disappointing 4.7%

Country's recovery likely to be delayed by national elections in April and May

Source: Business Times / India

[NEW YORK] India's economy grew 4.7 per cent in the three months ended December from the same period a year earlier, government data showed, evidence that the economic slump in the country is far from over.

Economists said the country's recovery would be delayed by the national elections in April and May. In the previous two quarters, the economy expanded 4.8 per cent and 4.4 per cent, respectively.

"It's certainly a little disappointing given that a number of measures had been taken to boost growth, and we were expecting that this quarter would be better than the last," said Bidisha Ganguly, chief economist at the Confederation of Indian Industry, referring to the figures from the December quarter. "I think the recovery will take a longer while than what was previously anticipated."

She said that flagging domestic demand was seen as one of the chief reasons for slow growth, with contributing factors of red tape hindering investment projects and high borrowing rates constraining consumption and investment.

-From New York, US

Fewer in US dream of owning a home

Source: Straits Times