200 times portfolio growth in 7 years; 23 year old prodigy in Nepali stock market; Interview with Sijan Bajracharya

Fri, Dec 28, 2018 11:39 AM on Exclusive, Interview, Stock Market,
200 times...

Anything that gets a little complicated often gets attacked with myths. Similar myths also shroud the capital market of Nepal. If we look at the total number of people involved, the primary market has become quite extensive, however secondary market is still failing to create that kind of charm.

With the digitization of all the procedural works, applying for an IPO (Initial Public Offering) has become very easy and takes just two minutes max. On the other hand, the processes to carry out transactions in secondary market are not that simple yet. On top of that, we have Myths like, “You need large capital to enter secondary market” and “You can get easily conned” and so on. What is more intriguing is the number of younger generation interested and participating in the secondary market. If we see the demographic composition of Investors, majority are middle-aged  and elder people. In light of this, we set out to see if there are any real-life exemplary youth who has not only started investing but has created something out of it.

On our search, we met Mr. Sijan Bajracharya who is not just an investor but an ardent investor. At the age of 23, his portfolio has already seen 200 times growth. So, to know more about his investment journey and what made him set out in this path Aakriti Thakali  from Sharesansar met with Mr. Bajracharya. The excerpts of the interview are:

When did you get into this sector?

It’s been exactly 7 years now. I started investment right after I finished S.L.C. and my first investment was on a Co-operative company. However, among the listed companies, I started from Jebils Finance. I vividly remember that experience, partially because I made a lot of mistakes while filling up the form. After 5-6 mistakes and a lot of asking around, I found my way. I had applied for 130 units in IPO and I got it too. Then it got listed and I sold it at Rs 107 per share making a gross profit of Rs 910, which after tax and other fees came out to around Rs 700. So that was my first earning, my very own.

Did your parents help you financially?

No, actually I had a habit of saving from very early on. So, that Rs 13,000 that I invested on Jebils Finance was my savings and even till now I haven’t asked my parents to provide me funds to invest. At times when I fall short, I borrow from them and I return them later with Interest. This has helped me understand the value of money and its utility.

What was the catalyst that prompted you in this sector? Are your parents investors?

The catalyst was my own interest and curiosity of course, but that curiosity was ignited by my father’s friends. They were investing in stock market and I used to hear them talk about it all the time. And when I heard them I used to feel like they were really big men, doing complicated and important stuff. So that piqued my interest in the field.

In addition to that, Accounts was and is my favorite subject and I like playing with numbers. So even studying and doing accounting and finance problems in college pushed me in this direction. It started like that, but after entering it has been an independent journey. I’ve made profit, I’ve lost some and it has been quite a ride so far.

In addition to that, my work experience has also helped me a lot. I worked at Sharesansar for over a year and now I’m at Nepal SBI Bank. Both of these places has helped me learn and grow a lot.

Did you also used to work back then?

Yes. I had created a Facebook page called SM Share Service, where I used to collect clients through contacts. I used to provide Share related clerical services like IPO form submission, dividend collection etc.. On one hand it generated some revenue for me and on the other hand kept me close with my field of interest.

After that I had registered a company named 3s Investment, but I couldn’t continue it. So, I sold the company and it still exists.

Do you think the field of study that we choose makes a difference?

No, the field of study is not the determining factor, but it can be a plus point. For example, a management student can have head-start against a physics student in understanding the systems and procedures as we already would have read it in our college. But no matter the field, if you are interested then it’s not that hard.

In these seven years, how has your portfolio grown?

My net worth today has grown by 200 times from my initial investment. Since, I haven’t taken any money from my parents all the assets I’ve accumulated so far is the reinvestment of the profits that I’ve made in the market.

Do you believe in diversifying portfolio and holding for long term or in short term profiting?

My philosophy is the convergence of these two ideas. I diversify my portfolio to minimize my losses. For example I buy and hold shares of Commercial Banks for long term gains, whereas I also buy and sell Insurance and Microfinance scrips for short term gains. And one other thing – I never miss an IPO.

In addition to not having a regulatory body, these days many Hydropower companies are not doing that well. Despite that, a lot of hydro companies are floating IPO. Do you also NOT miss them?

Well, in case of Hydro power company a little extensive consideration is necessary, and I definitely do not apply on all of the Hydro power companies’ IPO. As you pointed out, there is no regulatory body and many existing companies aren’t doing that well. So, analysis is always necessary for all investment but in this case a little more is required.

Our market is often characterized as rumor based. Do you think that’s true? What do you rely on for making your decisions?

That may be true to some extent but the gains from rumors are always short-lived. I rely on fundamental analysis for decision making and look at the basic indicators like the Earnings per share (EPS), Net worth per share, P/e ratio and the dividend history. And for surety I take suggestions from seniors, who have been in the market for longer. So rather than swaying with the wave, I believe in self-conscious decision making.

For example, if my required rate of return is 20% then I’m not going to invest in companies whose Return on equity (ROE) is below that. If my Required rate of return is 20% and I invest in a company like CZBIL, which gives 5.26% dividend then that won’t cover even one-third of my interest expenses. So I’ll look for companies whose return is above my interest expenses.

Most often we hear that our market isn’t organic and recently Investor Pressure Group also went on strike for the same. What is your take on that?

I’m not an expert but I don’t think our market is ruled by mafias. It’s a bear market and everyone is at loss now. The large investors of our market are the Mutual Funds and if we see their monthly NAV, then they are also at loss. I think the major factor is demand and supply, and when that comes into balance the market will too.

The policy demands made by the Pressure groups were valid and I also support that. We have been lagging for far too long now. It’s time to revolutionize the market so that innovation can be brought and for that effective and efficient policies are required along with proper implementation framework.

How active are you right now?

Since the market is bear, I’m not that active in buying and selling. However, I keep myself updated. I recently have also started a stock market related group named iLead Investment. The basic goal is to introduce youths to the system and manage small fund investments. However due to college and full-time job, the progress has been a little slow.

Final message:

It doesn’t matter what age you are. It doesn’t matter how little money you’ve got. The only thing that matters is the first step. Buy just one unit, but at least do it and this will slowly expand your comfort zone. Today, it is much easier to enter market then when I started out. You won’t have to stay in line for an entire day. You don’t need to invest huge amount. You can start with the money that you can save by avoiding one Saturday outing. And once it starts generating income, the forgone outing will be worth it and you’ll be able to go on two more outings with that money.

You can start with IPO and slowly your capital base as well as the understanding will start to increase. Then you can start buying from secondary market. I think a fundamental course is necessary as it helped me a lot too.