Nepse stages a come back in a big way; exceeds experts’ expectation

ShareSansar, August 27:

Propelled basically by Nepal Rastra Bank's formal clarification regarding the held-for-trading share investment, the only secondary share market of the country rebound in a big way today. So much so that the trading was halted for half an hour, and eventually the index gained a massive 4.18 percent or 38.57 points.

It came as a sharp contrast to its very upsetting performance over the past few days.

The market clearly exceeded somewhat cautious optimism of the key stakeholders when ShareSansar had approached them just before the market opened this morning.

“Now the market will surely rise,” President of Nepal Stock Brokers’ Association Narendra Sijapati had said at around 10:30 am. “However, it may or may not trade at the circuit level today since general investors are yet to fully recover from the panic. But the market will continue to rise further in days ahead.”

Sijapati had, however, said that the market will go on to breach 1,000 level within the next few days, and very like to breach the all-time high of 1175 eventually.

“The market  will continue to rise also because it is the season of the year when the listed companies, especially BFIs, start declaring dividend.

Chairperson of Nepal Investors’ Forum Raj Kumar Timilsina had also echoed Sijapati’s optimism before the market opened this morning.

“Had the central bank issued the clarification earlier, some players with vested interest could not have been able to spread the rumors that brough the market down,” says Timilsina. “Better late than never; the market will definitely start rising now.”

He added that he would not be surprised if the trading are held at circuit level, though he, too, feels that it may take a few days for the investors to fully regain confidence in the market.

“As for now, I believe the market will post a double-digit growth today itself,” he had further said.

Explaining how the market will now rise , he said that more BFIs, which have not bought stocks of insurance will start investing in the BFI stocks.

It may also be noted that the Insurance Board is about to announce a new investment policy that will allow the insurance companies to invest up to 30 percent of their investable fund in the stock market.

Can Nepse sustain this surge now?

“Now the market will further rise – at least for the next few days – as the investors have gained significant level of confidence,” Sijapti told Sharesansar immediately after the market closed for the day today. “Therewas so much of buying pressure that the seller did not even had to think about reducing the price of their stock.”

He further said that since there were a lot of buyers even by the time the market closed for the day, the Nepse index will also rise massively tomorrow -- though he is not sure whether it will hit a circuit tomorrow.

“One thing is clear, the market has already become bullish – again,” he added. “Yes, it has definitely exceeded our expectation.”