Nepse Index has still room to go up believes expert; short term correction is obvious
Nepse Index was successful in reaching 1175 points in the year 2065 BS. The main reason for the market to reach 1175 points was the positive sentiment of the investors after major political parties signed the peace accord. A favorable political condition will be established which will lead to the favorable business environment was the expectation of the investors. Nepal Rastra Bank (NRB) had brought the provision for the commercial banks to hike the paid up capital of Rs 2 about, which made investors to expect more bonus and right shares. Nepal Telecom shares also got listed in the same year. These all things pushed the market upward and market was successful in reaching 1175 points but it could not move forward and the market moved in bearish trend. In the year 2068 BS, NEPSE Index reached 292 points as investors lost confidence due to the worsening political environment, low dividend payment due to excess capital, increment in capital gain tax, high market interest rate. Finance Minister Dr. Baburam Bhattarai had given statement signaling share market as gambling place which further worsen confidence of investors.
Sandeep BikramRana
Fundamental Analyst
Nepse Index closed at 1377.33 points on Chaitra 14, 2072. Even after crossing the level of 1375 points, there is still room for the Nepse Index to go up.
There are major differences between the bull run of 2065 BS and 2072 BS which is why I believe that Nepse Index still have room to increase.
Market Capitalization has increased to Rs 14.60 Kharba whereas in the year 2065 BS, it was only Rs. 6 Kharba. The size of our economy has reached to Rs 21 kharba from Rs 6 kharba in the year 2065 BS which leads to major expansion of economy resulting greater opportunity for listed companies. The huge amount of the FDI flowing from different countries in different development sector is plus points. Finally, our political parties are able to write a constitution which will ensure the long term political and business stability.
The level of awareness regarding stock market in people has increased. The secondary market now includes institutional players like mutual funds and Insurance Companies which is supporting the market. Major infrastructure and rules required for the development of capital market is being brought by CDSC and SEBON which will regulate the market. Also national pride project like Tamakoshi is in the final phase and PPA and PDA of other mega projects are also being carried out.
More, Our NEPSE Index is calculated based on the value (No. of listed share * Market Price). NEPSE reaching 1350 points doesn’t mean that the price of every listed company is at peak. The big companies like NTC, EBL, NABIL, SCB, CHCL solely have the capacity to increase NEPSE index on the basis of their listed shares. Even at this point of NESPE index many companies are still undervalued.
We can take the example of the banking sector, the expected returns from banks can be easily beat interest rate that investors get from the fixed deposits. Moreover, I think there are lots of opportunities for investors as the stock market is growing.
Sandeep BikramRana
Fundamental Analyst
Nepse Index closed at 1377.33 points on Chaitra 14, 2072. Even after crossing the level of 1375 points, there is still room for the Nepse Index to go up.
There are major differences between the bull run of 2065 BS and 2072 BS which is why I believe that Nepse Index still have room to increase.
Market Capitalization has increased to Rs 14.60 Kharba whereas in the year 2065 BS, it was only Rs. 6 Kharba. The size of our economy has reached to Rs 21 kharba from Rs 6 kharba in the year 2065 BS which leads to major expansion of economy resulting greater opportunity for listed companies. The huge amount of the FDI flowing from different countries in different development sector is plus points. Finally, our political parties are able to write a constitution which will ensure the long term political and business stability.
The level of awareness regarding stock market in people has increased. The secondary market now includes institutional players like mutual funds and Insurance Companies which is supporting the market. Major infrastructure and rules required for the development of capital market is being brought by CDSC and SEBON which will regulate the market. Also national pride project like Tamakoshi is in the final phase and PPA and PDA of other mega projects are also being carried out.
More, Our NEPSE Index is calculated based on the value (No. of listed share * Market Price). NEPSE reaching 1350 points doesn’t mean that the price of every listed company is at peak. The big companies like NTC, EBL, NABIL, SCB, CHCL solely have the capacity to increase NEPSE index on the basis of their listed shares. Even at this point of NESPE index many companies are still undervalued.
We can take the example of the banking sector, the expected returns from banks can be easily beat interest rate that investors get from the fixed deposits. Moreover, I think there are lots of opportunities for investors as the stock market is growing.
