The demonetization of rupee 500 and rupee 1000 notes has adversely affected the stock markets. The participants do have a cause of worry but best is to see this state of market’s panic as an opportunity.

There is perceived ill effect of on cement and steel industry as this measure would affect the prices of flats on selling block; it is true that it will affect the real state prices. But let us analyse it. The fall in prices will mostly reduce the component of black money in the transaction and overall price payable for flats. We know that many in our country don’t enjoy the luxury of buying homes while they earn their incomes in white money and pay taxes but always failed to compete viz a viz the hoarders of black money when they entered the real estate market. This now changes and makes them more competitive and now there will be better absorption of flats lying unsold.

Further to it, the banks will have more money for lending and there will be check on inflation making the hands of RBI Governor stronger for reducing further interest rates. This will help the real estate market as well as the buyers.

The bullion traders might see reduction in their business but that also is a positive for stock market; the savings will be more directed towards investing in equity.

Rest of the industry will see only a temporary hicup and later it will be business as usual.

The luxury car market will remain like it was because luxury cars were being bought by ultra rich and by corporations only, all transactions recorded in books.

So sleep comfortably; enjoy investing as per our advice and sit pretty, hopefully you will have earned neat profits without taking excessive risk.

Krishna Khandelwal

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