Demonetization perfect step towards nation building: Nilesh Shah

In a move to curb the black money menace, the government has decided to ban Rs 500 and Rs 1000 notes. In an interview with CNBC-TV18, Nilesh Shah, MD & CEO , Envision Capital, said this is a perfect reform and perfect step towards nation building. He said this is significantly going to raise India's image and ratings internationally. It will create some disruption in the near term but it is a fantastic buying opportunity from the long term perspective. He further said banks and financial sectors will benefit the most out of all of this. These sectors unduly got battered today but in the long term they will recover. On the impact of US elections on market, Shah says as developments unfold it will have pressure on the global markets and the spill over effect on the Indian markets. He said there is enough ammunition for the markets to remain under pressure. This period could stay for couple of months and the lows of June at the time of Brexit could be revisited.Below is the verbatim transcript of Nilesh Shah’s interview to Latha Venkatesh, Anuj Singhal and Sonia Shenoy on CNBC-TV18.Latha: How are you going to approach this market, it is still a cliff-hanger between Trump and Clinton but no two ways about the domestic moves de-legalising Rs 500 and Rs 1,000 notes. What do you think? You think we are going to see some prolonged losses and India will be an underperformer at least for the next one month?A: This is a very important day for India. This has been a perfect reform or a perfect step towards nation building and this is a proud day for all Indians. This is significantly going to lift India\\'s image and ratings internationally and therefore this is an extremely long term structural positive for India. But having said that this in the very near term-short term will create some bit of lullness and if I could use the word it could create some disruption as well. So, this will definitely impact businesses and sentiments in the very short term but this is a fantastic buying opportunity from a long term prospective.Anuj: So what is your shopping basket looking like?A: Today is a day where you would have lots to pick and choose from but it is clearly banks and financials which will benefit the most out of this and this is probably one sector which has got unduly battered today but over the long term this will recover and the prospects for that entire piece only gets better and better.Latha: Why would Capital First fall 9 percent? Why would M&M Financial fall 10 percent, both of them are down 9, 10 percent? Would they be dealing so much in cash, Capital First is this an opportunity to buy these kinds of stocks?A: Absolutely. First thing is these stocks had done extremely done as stocks and therefore there would be some bit of taking profits off the table. But more importantly today is a day of collateral damage. You could have investors, market participants owning these stocks and would have to shed these positions to meet the margin requirements and beef up their liquidity. So, today is more a day of collateral damage, it is honestly not a day of fundamentals. There could be situations for a month or two where some of the borrowers really don\\'t know how to kind of - who might have been paying back in cash to some extent and would therefore be in a quandary in terms of how do you meet obligations and there could be temporary challenges of tech servicing for some of these Non-Banking Financial Companies (NBFCs) but that is a very temporary situation of lull. But maybe in a month or two it should be business as normal for them. Therefore these corrections should be used to kind of buying into some of these names.