Ambika Prasad Paudel, a Nepali business magnate, investor and the Managing Director of Hathway Investment Nepal Ltd. with a career span of almost 2 decades in both private and public sectors was recently appointed as the Chairman of Nepal Investors Forum, a non-profit organization working for betterment of Nepali Stock Market. In this backdrop, Prahlad Rijal of ShareSansar caught up with Mr. Paudel to talk about issues facing the market and Forum’s reformatory strategies.
Q.1: Lately, the Market has been showing volatile movements. What are the reasons behind it?
Despite being fundamentally strong, the market is volatile. However, one must be careful whether the movement is occurring over a short period of time or over a longer span. If the market is volatile for short period of time, we cannot call it abnormal. The movements in Nepali stock market depend largely upon investor’s sentiment which is guided by the market itself. A slight increase results in positive sentiments and vice versa. Moreover, investors are confused about short term and long term portfolios. Thus, a positive correlation between market’s direction and investors’ sentiments have resulted in volatile movements.
Q.2: How do you see the current scenario of the market? And what factors are at play?
Insecurity vis-à-vis liquidity is prevailing in the current market. News regarding liquidity ease has resulted in positive refraction leading to slight increase in the index. Previously, the banks released huge amount of loans during July and August and the market saw an ease of liquidity. As of these days, the banks are still releasing loans in heavy amounts which indicates that the market will enjoy high liquidity in the upcoming days.
Q.3: In which direction will the market move taking into consideration the ongoing elections. How will the market react after Dashain?
The country has leaped a big milestone with the local level elections coming to an end. It indicates that the federal and central level election will also conclude soon. It will surely lead to political stability. The upcoming days are investment friendly and all the sectors will see a positive inflow of investment leading to positive movement in the market. In my opinion, after the market resumes post-Dashain, it will take a positive turn. There are signs of higher return on dividends and share prices as compared to interests from deposits. As the rate of interest is declining continuously for the past few months, the returns from shares are higher than returns from interest. Thus, the investors might channel more funds in the share market if the interest rate continues to decline post-Dashain.
Q.4: As the newly appointed Chairman of Nepal Investors Forum, what are your plans and reformatory strategies to revive it?
The Forum will move forward in line with the changing times and needs of the market. We will make it more inclusive and are planning to restructure the Forum to make it the single-body addressing the concerns of all the investors and other stakeholders. To achieve our goals, we have pinpointed four reformatory strategies:
- Co-ordination with Stakeholders: We will get close to all the stakeholders, realize their concerns, and act according to their needs.
- Advocacy: We will carry out studies to find which laws, rules or policies are unfavorable for the development of the market. We will study well-developed markets and advocate the need for changing certain policies that impede our market from becoming more investor friendly. We are focused to bring positive changes which will result in higher level of transactions, increase in government revenue and overall development of the market. We plan to achieve this by carrying out comparative studies and by forwarding our concerns to the respective regulatory authorities.
- Financial Literacy: There is an impending need to raise awareness among all the investors. The forum is planning to organize seminars, interaction programs and training camps in the upcoming days to increase financial literacy among people and to mobilize the funds in various markets.
- Website Development: The Forum will have its own website in the upcoming days. The website will provide all kinds of information related to the market. We will focus on disseminating practical information and ensure investors’ access to right and useful information. It will result in an Information Technology (IT) friendly market making it more transparent.