Nepse slip continues even after festive season

KATHMANDU, Nov 4:

The festive season has ended but the Nepal Stock Exchange (Nepse) is showing no sign of recovery.
Nepse has already lost 178.97 points since July 21 when the benchmark index was at a six-year high. The index has shed 32.75 points over the past three trading days. It closed at 904.03 points on Tuesday.

Investors were expecting that the market would bounce back after the festive season. But continuous slide in Nepse index has shattered their hopes of revival. “Investors were expecting the market to revive after the Dashain-Tihar festive season. But to their dismay, Nepse is falling at a faster rate,” Narendra Sijapati, president of Stock Brokers Association of Nepal (SBAN), told Republica. “The market should have taken momentum after the festival season as the market fundamentals are good to drive up the benchmark index.

 However, the recent disputes among the political parties and the subsequent polarization in the constitution drafting process has affected the market,” he added.
Not only has the benchmark index dived, the daily turnover has also fallen drastically in recent days. According to Nepse, average daily turnover has come to Rs 250 million over the past month compared to average daily transaction of Rs 400 million in the beginning of this year.

Anjan Raj Poudyal of Thrive Brokerage House also agreed with Sijapati. “While there are number of reasons which should propel the market now, political wrangling in the Constituent Assembly (CA) over the constitution drafting process has cast a shadow over the market growth,” Poudyal added.

Investors, however, underscore the need to develop a system in the stock market which can withhold the political fallout.

“Even though all factors that drive the market are on the right track, the market is showing unusual signs by going down every day. The regulator should develop a system which saves the market from becoming victim because of political reasons,” Raj Kumar Timilsina, president of Nepal Investors Forum, told Republica.

Source: Republica