Lehman Brothers

The Recent scenario of the Financial Market is quite dismal. Every day the paper surprises us with another surprise – Trust me this kind of surprise is not much appreciated.  The downfall of Lehman Brothers, one of the oldest and certainly one of the pillars of the financial market is the latest surprise. We have understood that markets can be punishing and reversal of fortunes can be dramatic. The situation is far worse, if the organization is overleveraged — when loan and investment books are way more than its capital. What accumulates problems and leads to disaster are strange accounting practice and high-risk nature of the loans and investments. Moreover there are certain disclosure issues: Lehman, in its last conference call with investors, gave no clue that it was actually on the brink.

We did mention earlier that the entire structure of the World Economy is changing and this change has brought about a high impact casualty. The US investment bank Lehman Brothers which survived many a downturn including the Great Depression Of 1929 has announced today that it had filed for bankruptcy. The going bust of Lehman is an indication of the US Sub Prime Crisis and the effect it has on the rest of the world including India. Our Sensex was hammered even before Lehman formally declared bankruptcy, simply anticipating the news of their bankruptcy.

Mumbai, India: DLF Ltd has said it would invest Rs 3,500 crore - roughly a third of its planned initial public offering (IPO) - in building up its land reserves. This is significantly lower than its earlier plan of investing Rs 6,500 crore for the purpose.

Announcing its plans here today, DLF said it hoped to raise Rs 9,625 crore through a public issue of 1.75 crore shares in the price band of Rs 500-550 between June 11 and 14.

New Delhi, India: Nearly two dozen US funds are raising $3.5 billion for investments in Indian realty. This is over and above the $2.5 billion invested by overseas realty funds in India to date. Those raising the money include Wall Street powerhouses such as Blackstone Group ( $1 billion) Goldman Sachs ($1 billion), Citigroup Property Investors ($125 million), Morgan Stanley ($70 million) and GE Commercial Finance Real Estate ($63 million).