Don’t panic, say experts and regulators. It’s not end of the bull

ShareSansar, August 25:

In what may be dubbed as an alarming development, trading at Nepal Stock Exchange Limited (Nepse) was suspended for half an hour today due to selling pressure.

The trading was halted for half an hour after the benchmark index decreased to hit the lower circuit of 4 percent at 1:56 pm – less than two hours into the trading.
The market reopened at 2:26 pm to end at the regular closing hour at 3:00 pm.

The only secondary stock market of the country has been in a downward trend over the past few days for some reason. Naturally a lot of investors are now panicking.

But do they really need to be alarmed? Is it the end of the bull?

“We are very closely monitoring the market, especially the buying and selling orders,” Sebon spokesperson Niraj Giri told ShareSansar as the market closed for the day today. “We think that the only reason the market is falling is due to panic. Many investors fear that the institutional investors would start dumping stocks due to central bank directive (of 1% share investment). But the institutional investors are not doing anything like that.”

Nepal Investors’ Forum officials also agree with the regulator.

“No, the bull has not ended,” says Chairman of the Investors’ Forum Raj Kumar Timilsina. “It’s just that some investors have lost some confidence in the market, and that too, due to rumors being spread by some vested interest groups who want to bring the market down to hoard the stocks at a lower rate.”

He adds that there are no substantial reasons for the market to go down as there remains surplus liquidity in the capital market, the interest rates are really low and the economy not in a bad shape.

Timilsina also urged the central bank officials as well as media persons to clarify that the central bank does not intend to limit the stock investment of BFIs to one percent as such  a rumor is  affecting the market most.

“I also don’t think that give and take between the politicians over the new constitution is a strong reason for the market to go on a downward spiral,” he further says, adding that some market players are also spreading panic among the investors by citing little differences among major political parties as a huge crisis.   

He also urged general investors not to panic.

“The only those who hold their nerve and understand the market situation will eventually benefit,” Timilsina adds.

Nepse General Manager Sitaram Thapaliya, however, said he would not like to comment on the situation at this point.

“The market is driven by demand-supply dynamics. We have been noticing that the market has been going down over the past few days -- that’s all,” he told ShareSansar. “We don’t want to make any comment at this juncture which could influence the market.”