-  Monday 28 September 2020

Will bullish trend last at Nepse?

KATHMANDU, Feb 28 - The globally accepted positive correlation between economic trends and share market is often challenged in Nepal. When the governor of the central bank along with major news papers were warning against a looming financial crisis, Nepal Stock Exchange Ltd (Nepse) is on the bullish trend, as if the economy is shining
Particularly in recent weeks, the share prices of banks and finance companies are soaring like never before. Statistics show that the Nepse index grew by 32.80 points to touch 341.05 in the month February, while the index rose by 3.47 points on today's transactions and total turnover scaled to a record Rs 36.8 million, one of the highest single-day trading.

Unusually enough, the market capitalization at Nepse grew by around eight billion rupees to touch Rs 79.49 billion in February.

The unnaturally inflating balloon, which can burst anytime bringing a dire disaster, has not only worried commentators but also Nepse. And, taking unusual step, the Nepse today issued a notice and asked prospective investors to thoroughly study about the nature of work of company, its financial status, prospects for earning and risk management, before putting money in shares.

“We made such an appeal after we realized that the current growth was more speculative than market driven,” said an official at the Nepse. It is generally accepted fact that when economic fundamentals do not support the share prices rise in the stock market, the rise will not last longer.

Most of the investors coming into the stock market for share transactions now seem to be novices and are buying shares only on speculation. Rakesh Shrestha who was at the Nepse flour to buy shares said he was trying to purchase equities as he heard rumors that price would go up. “I do not know anything about the market,” he said.

However, he is optimistic that he would get handsome returns in the future. “I am investing money because I expect good returns from the equity,” he said.

Suman Shakya, another investor said he was investing money in anticipation of getting bonus shares and lucrative yields. But, he has no logic to support his expectations.

However, there are bonus days for those who are aware with the market trend. “I thought that it is high time to sell shares as prices are touching new highs,” said Jaya Prakash Shrestha, an experienced share trader.

The Kathmanud POst

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