TIDMNBPC
RNS Number : 6603B
Naya Bharat Property Company PLC
30 October 2009
30 October 2009
NAYA BHARAT PROPERTY COMPANY PLC (the "Company")
Third Quarter 2009 Summary
The net asset value ("NAV") of Naya Bharat Property Company Plc (the "Company")
stood at USD 0.61 per share on 30 September 2009. This represents a rise of
32.6% over the third quarter. The Company's share price increased by 28.1% over
the same period.
The share prices of Indian property companies continued their recovery over the
third quarter, supported by positive economic newsflow and renewed investor
interest in the sector. Many of the published statistics are now showing an
improvement in underlying activity and the government is forecasting that GDP
growth will have rebounded by the end of this year. India therefore seems to
have avoided the worst consequences of the global financial crisis. The new
government is embarking upon a programme of reform intended to bring real
benefits to the country over the medium term and this, allied with a variety of
fiscal stimulus measures and lower interest rates over the short term, lies
behind the performance of the stockmarket over the third quarter.
The signing of a free trade agreement with ASEAN nations, after several years of
negotiation, was a further positive development, though not one which will have
an immediate impact. Amongst other measures, import tariffs on more than 80% of
traded goods will be lifted between 2013 and 2016, helping to boost trade and
economic activity across the region. Earlier concerns with respect to the
monsoon, which has been unusually weak this year, seem to have been misplaced,
with little impact on economic activity.
The residential property market seems to have stabilized with prices in Mumbai
at least showing some signs of recovery. Affordable housing for the new mass
affluent remains the focus for developers and demand here is picking up on the
back of rising employment and cheaper mortgage finance. The realisation that
prices are unlikely to drop from current levels is also generating increasing
interest. Although the office and commercial sectors remain depressed, most
commentators expect these to follow the residential sector into recovery.
Renewed optimism in the outlook for Indian economic activity was reflected in
the share price movement of Phoenix Mills, a Mumbai-based real estate developer
that, in its own words, is "set to take on the challenge of redefining life
style in Indian cities". Having just come into the portfolio during the second
quarter, its share price appreciated by almost 80% over the third quarter as
investors began to appreciate the potential of its aggressive targeting of the
shopping and entertainment sectors.
Some changes were made to the composition of the portfolio over the third
quarter. These included new holdings in Hirco and Indiabulls Property Investment
Trust (IPIT). Hirco is one of India's largest property companies and is
currently developing a large-scale mixed use township in Chennai, targeting
India's growing young and affluent working population. IPIT was spun out of
Indiabulls Real Estate last year and is a Singapore-listed real estate
investment trust. The company has recently announced plans for a rights issue to
help bolster its balance sheet. Both investments were purchased on attractive
valuations and were funded from existing cash balances, though the small rump
holding in DSK Developers was divested over the quarter.
At the recent AGM, the Company was granted authority for 12 months to purchase
in the market up to 14.99 per cent of its own ordinary shares of US$0.01 each
("Ordinary Shares") in issue. The Company may use that authority to purchase
Ordinary Shares at a discount to the prevailing NAV per share if suitable
occasions arise and the Company has funds available for that purpose. During the
last financial year the Company purchased at a discount and cancelled a total of
5,925,957 Ordinary Shares of the Company at an average price of US 16.98 cents
per share. The Board will continue to actively use this program to buy back
shares at a discount thus enhancing shareholder value
The outlook for the property market in India remains encouraging, with high
rates of urbanisation and household formation combining with the prospect of
strong growth in economic activity over the years ahead to support not only the
residential sector but also the office and commercial sectors. The share prices
of Indian property companies remain significantly below their previous highs,
and continue to discount the true value of their assets. There is therefore
every prospect of a further appreciation from current levels.
Top 10 holdings:
Unitech 17.3%
Indiabulls Real Estate 15.9%
DLF 15.0%
HDIL 14.6%
Orbit Corporation 6.2%
Phoenix Mills 6.1%
Mahindra Lifespaces 4.0%
Unitech Corporate Parks 3.7%
Peninsula Land 3.3%
Ascendas India Trust 2.8%
Enquiries:
+-----------------------------------------+------------------------------------+
| Charlemagne Capital | 020 7518 2100 |
| Varda Lotan / Christopher Fitzwilliam | marketing@charlemagnecapital.com |
| Lay | www.charlemagnecapital.com |
| | |
+-----------------------------------------+------------------------------------+
| Panmure Gordon | 020 7459 3600 |
| Hugh Morgan / Stuart Gledhill | |
| | |
+-----------------------------------------+------------------------------------+
| Smithfield Consultants | 020 7360 4900 |
| John Kiely / Gemma Froggatt | |
+-----------------------------------------+------------------------------------+
Disclaimer
This document does not constitute an offer to sell or solicitation of an offer
to buy shares in the Company and subscriptions for shares in the Company may
only be made on the terms and subject to the conditions (and risk factors)
contained in the prospectus of the Company. Potential investors should carefully
read the prospectus to be issued by the Company which contains significant
additional information needed to evaluate an investment in the Company. This
document has not been approved by a competent supervisory authority and no
supervisory authority has consented to the issue of this document. The
information in this document is confidential and it should not be distributed or
passed on, directly or indirectly, by the recipient to any other person without
the prior written consent of Charlemagne Capital (UK) Limited. This document and
shares in the Company shall not be distributed, offered or sold in any
jurisdiction in which such distribution, offer or sale would be unlawful and
until the requirements of such jurisdiction have been satisfied. This document
is not intended for public use or distribution. The purchase of shares in the
Company constitutes a high risk investment and investors may lose a substantial
portion or even all of the money they invest in the Company. An investment in
the Company is, therefore, suitable only for financially sophisticated investors
who are capable of evaluating the risks and merits of such investment and who
have sufficient resources to bear any loss that might result from such
investment. If you are in any doubt about the contents of this document you
should consult an independent financial adviser. Investors in the Company should
note that: past performance should not be seen as an indication of future
performance; investments denominated in foreign currencies result in the risk of
loss from currency movements as well as movements in the value, price or income
derived from the investments themselves; and there are additional risks
associated with investments (made directly or through investment vehicles which
invest) in emerging or developing markets. Charlemagne Capital (UK) Limited does
not guarantee the accuracy, adequacy or completeness of any information
contained herein and is not responsible for any omissions or for the results
obtained from such information. The information is indicative only and is for
background purposes and is subject to material updating, revision, amendment and
verification. All quoted returns are illustrative. No representation or
warranty, express or implied, is made as to the matters stated in this document
and no liability whatsoever is accepted by Charlemagne Capital (UK) Limited or
any other person in relation thereto.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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