Bullish Nepse crosses 400-point mark
KATHMANDU, APR 26 -
The Nepal Stock Exchange (Nepse) index rose to 14-month high on Wednesday, registering a growth of 21.07 points to close at 409.41 points. This is the first instance that the Nepse index has crossed the 400-point mark in the current fiscal year.
The capital market is in bullish mood, following progress made in army integration and peace process. This week alone, the Nepse index had posted a 54.14-point gain. Such is the growth that the Nepse had to suspend the transaction mid-way one day after another. The transactions were suspended for entire day on Tuesday and Wednesday after index surged by more than five percent.
“Although surge in the market index is good at a time stock market stood at lower range for so long, the scale of upturn is bound to crash anytime if it is allowed to rise in the same way,’ said Rameshwor Khanal, economic advisor of Prime Minister Baburam Bhattarai.
“I had expected the Nepse index to reach 360-365 points today and 450 points at the end of current fiscal year,” said Khanal. “The scale of surge recently shows that it will go further up which may invite crash.” He made a forecast that the supply pressure would bring down market if the current rate of stock demands is not kept in check.
Although not much has changed in actual financial status of companies listed in the Nepse, the stock analysts and investors said that the progress made in peace process and constitution drafting have boosted investors’ confidence.
Stockbrokers say the new investors are in forefronts to buy the stocks now. “The positive news on political front won confidence of new investors who were willing to make investment in the capital market,” said Anjan Raj Poudyal, president of Stockbrokers’ Association of Nepal. The investors are purchasing the shares of better companies such as Standard Charted Bank, Nabil Bank, Chilime Hydropower Company among others at a time when their shares trade at relatively lower prices.
On Wednesday, the groups representing hydropower and commercial banks were among the highest gainers. The hydropower sector gained 40.69 points and the group representing commercial banks registered a growth of 30.96 points.
“Unexpected level of growth in the capital market seen in the recent days could be due to anomalies in the secondary market,” said Stock Analyst Rabindra Bhattarai. “Some vested interest groups may have played their role to push the market high.”
Source: Kantipur
