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Market roundup | Remonetisation picks up pace

LiveMint logoLiveMint 02-03-2017 Livemint

That the Reserve Bank of India (RBI) has been supplying new notes at a faster pace is evident from the currency data from the central bank. The latest numbers show that currency in circulation as of 24 February rose to Rs11.64 trillion, a 2.9% rise in that week. Much of this has also to do with the fact that RBI has been gradually lifting withdrawal limits for the public. From 13 March, limits on currency withdrawal from ATMs and accounts will be relaxed and this is likely to increase the pace of remonetisation further.

Commercial real estate to see demand in 2017

Contrary to the residential segment, commercial real estate saw sustained demand during 2016, primarily from industries like technology, consulting, financial services, telecom and e-commerce, etc. During the current year too, this segment is poised to see a lot of interest especially from the investor point of view, said a report by CARE Ratings.

Major realty funds and private equity funds have been acquiring Grade-A properties across the top business centres of the country in the past few years with an eye on rapid business expansion, and that would lead to demand for commercial and office space. Grade-A buildings are classified on the basis of their location, providing good access and proximity to public transport and infrastructure, and are professionally managed by property managers.

Also, with REIT (real estate investment trust) finally entering its implementation phase, the market would see inflow of investments. However, since the above mentioned sectors have been recently cutting down on their costs, there would be a sharp decrease in demand going forward from these sectors. Also, owing to higher addition of commercial spaces in high-demand markets of Bengaluru, Hyderabad and Pune, lease for commercial properties may not appreciate the way they have historically, it added.

Low pest attacks dim agrochemicals outlook

Agrochemical sales which were hit by low pest infestation, deficient rain in south India and cash crunch in the October-December quarter may not see any significant recovery in the current quarter, warns Emkay Global Financial Services Ltd. January-March (fiscal Q4) is seasonally a lean quarter for agrochemical companies. But delay in winter crop sowing was expected to push some sales into the current quarter. This expectation is now dashed due to high inventories and low consumption in south India.

“Low pest attacks, lower acreages in south India and higher inventory carried forward from previous quarter are likely to weigh-in on pesticide consumption during Q4FY17 as well which could result in muted revenue growth for the industry,” adds Emkay.

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