Nepse continues rally
KATHMANDU, APR 17 -
For the second consecutive day on Monday, the Nepal Stock Exchange (Nepse) suspended share transactions midway, with the benchmark index surging by more than 5 percent.
The benchmark index gained 17.16 points to close the day at 354.51 points. The market has surged by 34.57 points in last two days.
Circuit breaker—a tool of stabilising the market when index moves unexpectedly high or low—is applicable at three stages of the index movement either way at 3 percent, 4 percent and 5 percent. In case of a 3 percent movement of the index within first hour of trading, there will be a 15-minute market halt. If the benchmark index fluctuates 4 percent within 2 pm, there will be a trading halt for half an hour. And in case of 5 percent movement, regardless of the time, share transactions are halted for rest of the day.
Stock analysts and economists attribute this growth to the recent development in peace process that improved investors’ sentiment. They say the latest political development has infused a fragrance of hope among investors that the country will get political stability leading to an investment-friendly environment.
“The capital market has remained severely under-priced for a long time and the latest political development has boosted investors’ confidence,” said Rameshwore Khanal, economic advisor to the Prime Minister. “I think the market’s upward momentum will continue for the next 7-8 days.” Khanal added that the market was unlikely to fall again as long as the current momentum in constitution making process continues. Political leaders are putting all their efforts in resolving contentious issues.
Earlier, the government, Securities Board of Nepal and Nepal Rastra Bank took a number of measures, including reducing capital gain tax for stock investors, easing margin lending and setting up a central depository system, but failed to revive the market. Therefore, political stability plays a bigger role in boosting investors’ confidence, Khanal says.
On instances of the market tumbling heavily the next day of a rally due to big players’ manipulation, Nepse General Manager Shankar Man Singh said he has so far not seen such an act by big investors as no big transaction has been carried out by a single group.
“It seems that investors have taken decision wisely as share prices of normal companies are not increasing at the same rate as blue chip companies’ share prices,” said Singh, admitting, however, that one cannot categorically conclude that the bullish trend is back without watching the trend for the next 7-10 days.
Among companies that posted big gains on Monday are Standard Chartered Bank, Nepal Telecom, Everest Bank, and Nepal SBI Bank.
Source: Kantipur
