India’s Property Recovery to Drive Stocks, BofA Merrill Says

Dec. 11 (Bloomberg) -- A recovery in Indian commercial property and rising home prices in Mumbai and New Delhi will boost asset values and drive real estate stocks next year, BofA Merrill Lynch Global Research said.

The brokerage was reinstating coverage of the nation’s property industry with a “bullish” stance and has a “buy” recommendation for Indiabulls Real Estate Ltd., DLF Ltd. and Housing Development & Infrastructure Ltd., BofA Merrill Lynch analysts Unmesh Sharma and Gagan Agarwal said in report today. They have a “neutral” recommendation for Unitech Ltd., the second-biggest developer.

“Real estate stocks have experienced a sharp rally since March 2009 on the back of capital raising and increased sales volume in the residential segment,” the analysts wrote. “We expect commercial property and pricing to surprise positively, leading to the next round of significant net asset value upgrades.”

Housing Development, the nation’s third-largest developer by value, has more than doubled in Mumbai trading this year, leading gains among the largest property stocks. The benchmark Sensitive Index, also known as the Sensex, has risen 80 percent, poised for its best annual performance since 1991.

‘Overly Concerned’

Real-estate sector leads in black money, finds FinMin

The investigation department of the ministry of finance has unearthed black money to the tune of over Rs 4,500 crore during the last financial year, with the quantum of such unaccounted money highest in the real estate sector at around Rs 2,000 crore.

This was followed by the manufacturing sector, which saw a growth of 215.15 per cent in black money during 2008-09, a source from the intelligence department of the ministry told The Indian Express.

The source said the investigation directorate, which constantly keeps track of the growth of black money in different sectors and accordingly shifts its focus, conducted the highest number of search operations — 123 — in the real estate sector. It also conducted searches in sectors like manufacturing (79), jewellery (33), professional, financial, and education.