Oversupply of shares and investor’s dilemma prevail in the market, immediate chance of vertical hike in NEPSE is low: Merchant Bankers

The Nepal Stock Exchange (NEPSE) is currently observing volatile movements with the investors showing lack of confidence about its presumed positive growth. In this backdrop, Pralhad Rijal of Sharesansar talked with Merchant Bankers to give their opinions about the current scenario of the secondary market and factors at play. Excerpts: Mekh Thapa (General Manager, NIBL Capital Limited):  If we consider the fundamental indicators of the companies, they have shown a good growth and whatever the situation is right now, the market will see positive growth in the upcoming days. Moreover, the liquidity is high and banks are lowering their interest rates this might lead to an increase in the supply of funds in the market moving it in a positive direction. Furthermore, the upcoming elections will trudge the Country towards political stability and it will help the market to gain good momentum. Shreejesh Ghimere (CEO, NMB Capital Limited): There is an oversupply of shares in the market. The disequilibrium of demand and supply has led to volatile movements in the short run. Despite a fall in interest rates, the hassles in obtaining loans will remain same. However, the market might react positively to the upcoming elections. But, the chance of a vertical hike in the index still remains low. Dhruba Timalsina (CEO, Siddhartha Capital Limited): Uncertainty is looming over the market and there is a lack of confidence among the investors. Oversupply of shares is prevailing in the market. Moreover, despite having good fundamentals, the shares are undervalued. However, the market will not fall drastically. But at this point, there is uncertainty over, the direction that economy will undertake after elections conclude; the markets’ direction in the future depends upon the state-wise-resource allocation policies of the government. On top of that, one must carefully observe the fundamentals and keep a keen eye on the economic factors in the upcoming days. Paras Mani Dhakal (CEO, Global IME Capital Limited): The market has not been able to adjust the supply and the investors’ confidence is low these days. However, the market will see positive growth after the economy achieves political stability and development targets in the upcoming days. Oversupply has led to the current movement in the market. Sandeep Pradhan (Head- Investment Banking and Company Secretary, Laxmi Capital Market Limited): The chances of immediate fall in interest rate are low and investors are facing a dilemma. However, if the interest rates on loans decline in the upcoming days, the market will see a positive growth. Moreover, with the elections on line, the government spending will increase adding up to the liquidity in the market. As of now, there is an oversupply of shares and investors have not been able to capitalize funds in line with the number of additional shares. Bijaya Lal Shrestha (CEO, Sunrise Capital Limited): As of now, there is uncertainty in the market. The supply has gone up and the recent political developments have affected the market adversely. Investors have not been able to book profits because of oversupply and that has lowered their confidence.