STOCK MARKET DESK

Academically, there is a direct correlation between stock market crash and property prices crash. Normally there is a time lag of approximately six months to one year between stock market crash and property prices crash. Whenever the stock markets have been passing through boom times, demand for and prices of property have gone high. Likewise, in depressed Stock markets, the property prices tend to soften. The reason for the relation between the two markets is that in rising market, the huge gains find real estate as the ideal place for parking funds leading to escalation in prices and in a falling market disposal of property is the quickest way to cover losses leading to a fall in property prices.

People who have lost heavily in stock markets are keen to dispose off their investments in the real estate market. Distress selling always depresses prices. Small builders facing financial shortage have to sell some of their property to meet financial requirements. Many other individual investors, who have purchased multiple properties with their own funds or loans for speculative purposes, now have to sell some of their property before prices go down further. Reports from Mumbai, Delhi, Bangalore, Ahmedabad and Coimbatore clearly indicate that property prices (specifically residential property) have dropped 10 to 15 percent in prices. Fresh buying has come to a screeching halt in all major cities. The stock market correction could result in real estate prices coming down by 15-20 percent over the next 3 to 6 months. If the demand does not improve prices would start moving down and It would not be a surprise if the prices drop by up to 30 to 40 percent in near future.

Indian-born steel tycoon Lakshmi Mittal is the richest man in Europe with his fortune estimated at a staggering 27.7 billion pounds, even as he emerged as Britain's wealthiest person for fourth year in a row.

Over all, the steel baron, whose wealth saw a whopping increase of 8.5 billion pounds in a year, is the sixth richest in the world, a rich-list published by the Sunday Times said today.

His company ArcelorMittal is now worth more than 57.2 billion pounds and the Mittal family's 43 per cent stake is worth 24.6 billion pounds.

According to the list, the Ambani brothers, Mukesh and Anil, although they have parted ways, together were rated as the richest in the world at a combined worth of 43 billion pounds, ahead of America's Walton family, owners of Wal-Mart (38.4 billion) and Microsoft chief Bill Gates (29 bn pounds).

There were two more Indian entries in the list of 50 richest in the world in 2008 - K P Singh (property - 15 billion pounds and Shashi and Ravi Ruia (steel, oil telecoms - 7.5 billion pounds).

Meanwhile, the Hinduja brothers, S P Hinduja and G P Hinduja, Chairman and President, respectively of the group were Britain's second richest with 6.2 billion pounds.

Leading NRI entrepreneur Lord Swraj Paul was the fourth among the ten richest Asians in Britain, the list said.

The London-based Caparo Group of 77-year-old Lord Paul, British Ambassador for Overseas Business, is making hefty investments in the booming Indian economy.

In 2006, its profits were 55 million pounds on 660 million pounds sales.

Ashok Leyland has said that it will invest Rs 30 billion for a new plant in Uttarakhand and expand capacity at its Ennore facility in Tamil Nadu, according to reports in media.

The Hinduja group’s flagship company is setting up a 50,000-unit capacity plant in Uttarakhand, that gives income tax and excise breaks to investing companies.

Fresh investments would also be used for new engine development in partnership with Austrian firm AVL, Ashok Leyland CFO K Sridharan told media. "The company will invest additional Rs 30 billion on the new vehicle plant coming up in Uttarakhand, besides expanding the plant at Ennore and engine development," Sridharan said adding that the first vehicle from integrated plant at Uttarakhand by April 2009.