None can deny the fact.. The banning of higher currency notes is a major move which will help control the un-accounted cash. Economists feel that this may act as a first step towards increased transparency in India. This will undoubtedly have a ripple effect on few sectors directly and indirectly.
Real estate and gold will have a major correction because they are the main investment instruments used by individuals to hold their black money.
Let us see the top sectors that are going to see positive and negative impacts.
1.Real Estate Sector:
The real estate sector is likely to see a significant negative impact in the medium-to-long term particularly in the repurchase market. Most of the transactions are done in cash and under value registrations are very common in this sector.There are expectations of a revaluation of current real estate transactions across the board. At this moment, this will surely impact the demand in the property market and there will be a possible decrease in the property and real estate scope for investment.This will also indirectly impact the sectors like construction,metal,cement and other sectors too.
2. Gold & Bullion Market:
Like real estate sector, Gold is again the most used option for converting black money apart from the fact that this sector depends heavily on cash transactions but with this move, there will be a stop on this and the stocks of jewelery and companies which makes luxury goods will correct big time, especially in the upcoming quarters. Most of the discretionary spending will come down and there will be a liquidity crunch and no ways of using any unaccounted money for entering into any transactions.
3. Banking and Financial Sector:
This sector is likely to benefit the most from this move because a lot of deposits will be done in the banks bringing a lot of money and the use of debit and credit cards will increase immensely, for the time being. Net banking facility will also add up to the revenue of the bank owing to maximum utilization of it. Financial Services will be the need of the hour for each and every individual, especially the business community.
4. Stock Market:
An increase in Uncertainty is always a negative factor for equity markets. Uncertanity in global markets will also add to the present scenario. Markets will recover in the medium-term as the uncertainty eases. While there exists a possibility of a broad based decline, there will be some sectors will are likely to have a big downfall, while some niche technology sectors related to fin-tech and e-commerce could gain. The long-term outlook remains positive.
banking; Payment gateways; Cards; Mobile wallets; Online retail; Net and payment banks; e-marketplace
Agriculture; Luxury goods; Real Estate; Commodities; Traditional Retail – Consumer durables and consumer non-durables.
5. Other Sectors :
The luxury goods market is also likely to get affected as this move represents an erosion of real wealth to a large number of people. Areas of sub-sectorial impact will be felt in luxury cars, SUVs, gems, jewellery, gold and high-end branded products.