Luxury housing, growing digitalization, and warning for Franklin Templeton’s investors: Three things Teji Mandi investors should know on April 8, 2021
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Growing Demand for Luxury Housing

Luxury housing sales in India’s seven major markets went up 21% in February to 8,219 units from 6,786 units a year ago, according to a report by real estate data analytics firm PropEquity.

Delhi-NCR emerged as the biggest market with a 54% increase in luxury housing sales. Mumbai Metropolitan Region (MMR) was next with a 37% increase, followed by Bengaluru (13%), Pune (12%), Chennai (8%), and Kolkata (7%).

New project launches in the luxury segment have also gone up. A report from Anarock also suggests that nearly 5,300 luxury homes are launched between January and March 2021 in the top seven markets, a 31% jump from 4,040 units a year ago. It is an indication that the high demand for luxury homes is likely to continue in 2021.

The luxury housing market has seen a renewed level of interest from buyers since the breakout of the pandemic. It has changed the priorities of homebuyers. Amenities like private outdoor space or in-home relaxation avenues have become more important for the affording ones.

The Great 'Digital Inclusion'

The Reserve Bank of India (RBI), in a step to promote growing digital transactions, has allowed fintech companies to process RTGS and NEFT transactions. It has also set new norms on interoperability and cash withdrawal facilities for digital payment wallets.

NEFT and RTGS are convenient tools for processing big-ticket interbank settlements and business payouts. But, their spread is limited since it has been accessible only by banks until now. With this move, companies such as Paytm, Visa, Mastercard and PhonePe etc, will soon be able to process RTGS and NEFT payments.

Digital transactions are growing at a rapid pace in India. By inviting fintechs to join the Centralised Payment Systems (CPSs), the RBI has removed an important bottleneck. It will further help to expand the scope of digital payments. Growing digitalization, in turn, will lead to the formalization of the economy.

New Warning Against Franklin Templeton

Franklin Templeton is finding it difficult to gain the market's trust ever since it shut down six debt schemes. This fiasco resulted in Rs 26,000 crore getting stuck into the scheme with investors not able to withdraw their money.

Five of the six debt schemes have recently released the money after a gap of 10 months. Considering this, Prime Investor, a Chennai-based independent research firm, has warned investors to exit from all schemes managed by Franklin Templeton Mutual Fund.

The report expects Franklin Templeton to face issues such as underperformance of the equity schemes and slide in assets under management (AUM) due to the unprofessional handling of events. They also anticipate the loss of confidence for Franklin Templeton's funds among investors and likely flight of talent.

The report from Prime Investor is not based on the actual performance of the schemes. In contrast, its arguments are completely speculative. They are based on the possible course of events that may or may not pan out. Hence, instead of relying on such reports, investors must study the performance of their funds and make independent decisions.

Free Press Journal