Rumors about bank mergers affect share trading
ShareSansar, Sept 22:
Unfounded rumors related to mergers of some banks and financial institutions as well as misleading insider information about the change of guards in some BFIs, wrong interpretation of policy changes, among others, have recently created upheavals in the share market.
Though a handful of investors stand to benefit from such rumors spread by some interest groups, the majority have suffered unnecessary losses.
Some of the big rumors that are making the rounds include the mergers of Everest Bank and Commerz and Trust Bank, Everest Bank and Kumari Bank, Nabil and Ace Development, the Bank of Kathmandu and ICFC, ICFC and Grand, and Global IME and Commerz and Trust.
However, none of these rumors are founded.
The Nepse index dipped by 1.02 points to close at 548.98 points last week -- largely due to such rumors.
For instance, the rumor about the merger of Global IME and Commerz and Trust Bank made the price of the shares of these banks very volatile. The share value of Commerz and Trust Bank surged while the prices of Global IME’s shares slumped.
After both the banks scotched the rumor and clarified that they are not planning any merger in the near future, the price of Global IME Bank’s shares rose by Rs 22 during the last day of trading last week.
Share analysts say that even small rumors about a possible merger are enough to fluctuate the share prices in the only share market of the country.
“Share investors should be able to filter out such rumors and the market movement they trigger,” says share analyst Amrit Nath Regmi.
Another problem is the fast changing policy-wise decision of the concerned authorities, they add.
Some bankers maintain that some investors who are trusted by the market are spreading such rumors for their vested interest.
Stock Brokers’ Association and SEBON officials also said that the rumors being spread by some investors as well as wrong interpretation policy ranges, especially by some media organization was affected the share market of late.
