EXPERT SPEAKS: CDS will take the market to a new height after Dashain festival

•    Ananta Poudel (Poudel holds the key position with Online Securities (Broker #49) which is a leading brokering firm of the country) Though there was a degree of panic in the share market after the sharp fall over the past weeks, the market has more or less stabilized now. The market is taking some time to fully regain confidence because ofthe supply pressure from the investors, who tend to take short-term position and who had made a reasonable profit, just as the market began to slide down. Moreover, if we look at the trends over the past few years, we realize that the market remains sluggish in the face of the Dashain festival as investors want to book profit and also because there is somewhat pressure of the interest of marginal lending. But with the government and regulators move to clear the air surrounding unwanted rumors as well as good dividends being proposed by the listed companies, the market is recovering. Though political uncertainty looms in the horizon, it is not so severe at this time that the market should fall. On the other hand, the BFIs are still willing to offer impressive interest rates for marginal lending as the surplus liquidity remains in the system. Talking in terms of figures, there is 2 to 3 percent risk in stock investment while the average return stands at 5 to 5 percent. That much risk as well as returns are, in fact, encouraging things. Other encouraging things include the arrival of new mutual funds in the market. More are in the pipeline, and are expected to be approved soon. They are market markers as they create market demands and depth in the market. Last but not the least, the most encouraging thing is that the stocks of commercial banks, which form the major chuck of the market capitalization, will be traded only through CDS immediately after Dashain. Though it may take some time for the investors to get used to the system, the market will definitely rise to a new height once they come to realize that they can trade stocks more easily and fast with the CDS. So, I believe that within a month or so, the market will start to rise steadily after Dashain festival.