Experts: NEPSE slump temporary; govt-backed basket fund likely on cards

Amendra Pokhrel
ShareSansar, May 26:

While the share market struggles with the disaster-triggered slump, most experts ShareSansar.com spoke to said the downturn will prove to be a short-lived one.

Praveen Raman Parajuli, the head of Nabil Investment Banking Limited, said that a slump in the market for sometime is a natural reaction to the massive disaster the country just went through. While stopping short from predicting a time frame for recovery, Parajuli said there was no need to panic as market will rebound soon.

He opined that long-term investors should not create supply side pressure by rushing to sell their shares but rather wait and let the market stabilize.

“A short term investor should plan his course of action based on whether he or she is at the entry point or exit point,” said Parajuli. “Those who have already invested, they should resist the temptation to sell shares as we see no problem in the long run. But it all depends on an individual investor’s resistance capacity. For some investors selling might be a necessity but those who can wait should take time to assess the situation before selling their shares.”

Meanwhile, Parajuli also said that government is considering pouring in money into the market to help it weather the slump. “I have also come across unconfirmed news that Finance Ministry is considering the option,” said Parajuli.   

Sushil Kumar Aryal, chief of investment at Citizen Investment Trust, said that discussions have been going on among concerned stakeholders, including Finance Ministry about pouring in money to help the market return to normalcy as soon as possible. But Aryal was quick to add that any decision to fund the market would not be taken overnight and it would take some time to arrive at a decision.

He, however, played down the notion about market being in panic mode. “NEPSE has seen worst slump and it was well below the point it is now just a few years ago,” Aryal said.

Aryal said if and when a decision is taken to inject funds into the share market, the government will involve CIT, Beema Sansthan, Employment Provident Fund, among others.

On the other hand, Bimal Pandey, an investor, said the panic in the market is a real one and there would be no return on investments for at least two to four months. “The word that has gotten out that the government is planning to pour in money from CIT and Nepal Telecom to give some stability to the market,” said Pandey. “Short term investors should wait to buy shares and they don’t have to be aggressive.”