Pime Minister Modi announced demonetisation of nearly Rs 15.44 lakh crore of cash on November 8, 2016, Today we have completed 1 year of this exercise.
There are many pros and cons discussed but from Stock market perceptive it has been a Big WIN _WIN. Market Return are the proof.
One Year of Demonetization
Return on Index
Nifty up by 21%
Sensex up by 21%
Nifty Bank up by 30%
Midcap index up by 27%
Small Cap index up by 37%
Nifty has been on a one way rally. From low of 7893-9490 in 1 year.
Bank Nifty has outperformed Nifty by a margin of 9%.
Reason for this rally can be attributed to Money pouring in Mutual Funds as Markets are driven by liquidity.
Retail investors poured in record $325 bn in equity markets via MF post demonetisation.The Mutual Fund industry AUM has now swelled to a record USD 325 billion driven largely by strong retail participation.
In last one year, mutual funds have purchased equity worth Rs.96,483 crore in spite of FII’s selling equity worth Rs 60,968 crore during the same period. FII’s are getting a good exit as they have made major purchases in 2011-2012.