L&T bets big on real estate;

bags Rs 610 cr order from Dubai co... Source: INDIATIMES NEWS NETWORK

Larsen & Toubro and Eastern Contracting LLC (Eastern) have jointly bagged an order worth Rs 610 crore from Victory Heights Golf Residential and Development, to build a residential property in Dubai Sports City. The project is expected to be completed in 660 days. The order win spurred L&T shares to an intra-day high of Rs 1,967. At 12:45PM, the shares were up 1.39% at Rs 1,954, with volume traded on BSE at 1,27,451 shares against the two-week average of 2,22,564.

L&T and Eastern Contracting, a Bukhatir group company which undertakes a variety of turnkey and other construction projects in United Arab Emirates, have formed a joint venture to execute this project. Taking a cue from rising demand for commercial and residential projects in India, L&T expects to carve out a niche for itself. The engineering major is planning to invest Rs 8,000 crore in real estate and urban infrastructure over a period of three to five years through its subsidiary L&T Infrastructure Development Project, according to media reports.

The company has already invested Rs 700 crore in real estate and urban infrastructure projects. The management will also be investing an additional Rs 500 crore in the business this year. L&T Infrastructure is developing residential projects in Chennai, Vishakapatnam and Colombo, apart from an integrated township in Chandigarh in association with a local builder. The company recently acquired land in Nagpur for a residential project. L&T Infrastructure has also undertaken a redevelopment project of a dilapidated building in Mumbai along with Bombay Dyeing.

Indian rupee to be traded in the futures market, dealers apprehensive

By Vipin Agnihotri

Lucknow, India: It has come into the notice of The India Street that for the first time in the history, the Indian rupee is going to be traded in the futures market. According to sources, trading is scheduled to start on June 7 on the Dubai Gold and Commodity Exchange (DGCX).

It is worth mentioning in this regard that while DGCX chairman Colin Griffith announced the launch of the world's very first Indian Rupee currency contract, some of the dealers in India have expressed apprehension to The India Street that the move might enhance volatility in the currency.

The pivotal factor here is that, as the transaction will take place in Dubai, Reserve Bank of India cannot do anything. Apart from that, there would not be any settlement in Indian rupee in the transaction. “RBI was unable to object to the move though it could affect the rupee's market value,” pointed out M Subri, a senior Forex dealer.

At the present juncture, rupee trades in non-deliverable forward market in Singapore, Hong Kong and Dubai and what’s more only big players participate. “While Rupee will be the underlying currency on DGCX, the transaction will be in dollar terms and trading will be open to everyone,” pointed out Rahul Bhandari, noted Indian economist.

Now, as Reserve Bank of India has allowed an individual to remit $100,000 a year overseas, a requirement is being felt for an international futures market. The interesting aspect in the whole issue is that the value of rupee in the global futures market identical to DGCX would be influenced by its value in the domestic market. In the domestic forward market, a transaction is settled with the physical exchange of rupee.

According to experts, at DGCX, each Indian rupee contract would represent Rs 20 lakh. Prices will be quoted in US cents per Rs 100, with a minimum price fluctuation of $ 0.000001 per rupee. Furthermore, at any point in time DGCX will list the trading price for the present and next two calendar months, in addition to the next three calendar quarterly months.