Sebon initiates study on sudden market rally
KATHMANDU, JUN 24 -
The Securities Board of Nepal (Sebon) has initiated a study on the unexpected rally in the stock market.
Since last Friday, the capital market is in a bullish trend. On Thursday, the Nepal Stock Exchange (Nepse) gained 20.18 points and realised a turnover of Rs 71.5 million. Hydropower, commercial banks and others sectors led the gain.
Due to the sudden rise in the stock index, the market operation was suspended twice on Thursday— second time in the week. “There is no major reason behind the sudden rise in the capital market,” said Sebon Director Niraj Giri. “That’s why we initiated the study.” Giri suggested that investment decisions should be taken on the basis of reliable information.
The bullish trend in the market coincides with reports that the Nepal Rastra Bank will further simplify margin lending (loans against shares as collateral) and major institutional depositors such as Nepal Telecom, Citizens Investment Trust, Employee’s Provident Fund and Rastriya Beem Sansthan are entering the secondary market.
Generally, the stock market rises when hints such as rise in profits of companies, policy change and publication of financial statement start to appear. It has been suspected that the current rally is artificial as there is no presence of institutional investors to stabilise the stock market.
Stockbrokers say banks and financial institutions accepting shares as collateral might have worked as the current fiscal year is nearing to an end.
According to analyst Rabindra Bhattarai, the present trend can be explained as the market getting a fair price of shares. “Shares of better companies are being traded well,” he said.
Also, investors might have been purchasing shares assuming that share prices of many companies were less than their actual value. “There is a trend of new investors purchasing shares when the market takes a positive trend,” said Bhattarai.
However, it is unsure whether the current market rally will sustain for long. “We can predict something after seeing next week’s trend,” said Anjan Poudel, president of Nepal Stockbrokers’ Association.
5 new stockbrokers
The Securities Board of Nepal (Sebon) granted licenses to five new stockbrokers on Thursday. Sunny Securities, South Asian Bulls, Lynch Stock Market, Imperial Securities and Creative Securities have been given licenses as they have completed putting together the infrastructure and human resources after opening their offices, said Sebon in a press statement.
Market over the week
Date >> stock index >> change in pts
June 15 >> 292.32 >> -5.31
June 16 >> 303.53 >> 11.21
June 19 >> 318.99 >> 15.46
June 20 >> 330.77 >> 11.78
June 21 >> 344.22 >> 13.45
June 23 >> 364.4 >> 20.18
Source: Kantipur
The Securities Board of Nepal (Sebon) has initiated a study on the unexpected rally in the stock market.
Since last Friday, the capital market is in a bullish trend. On Thursday, the Nepal Stock Exchange (Nepse) gained 20.18 points and realised a turnover of Rs 71.5 million. Hydropower, commercial banks and others sectors led the gain.
Due to the sudden rise in the stock index, the market operation was suspended twice on Thursday— second time in the week. “There is no major reason behind the sudden rise in the capital market,” said Sebon Director Niraj Giri. “That’s why we initiated the study.” Giri suggested that investment decisions should be taken on the basis of reliable information.
The bullish trend in the market coincides with reports that the Nepal Rastra Bank will further simplify margin lending (loans against shares as collateral) and major institutional depositors such as Nepal Telecom, Citizens Investment Trust, Employee’s Provident Fund and Rastriya Beem Sansthan are entering the secondary market.
Generally, the stock market rises when hints such as rise in profits of companies, policy change and publication of financial statement start to appear. It has been suspected that the current rally is artificial as there is no presence of institutional investors to stabilise the stock market.
Stockbrokers say banks and financial institutions accepting shares as collateral might have worked as the current fiscal year is nearing to an end.
According to analyst Rabindra Bhattarai, the present trend can be explained as the market getting a fair price of shares. “Shares of better companies are being traded well,” he said.
Also, investors might have been purchasing shares assuming that share prices of many companies were less than their actual value. “There is a trend of new investors purchasing shares when the market takes a positive trend,” said Bhattarai.
However, it is unsure whether the current market rally will sustain for long. “We can predict something after seeing next week’s trend,” said Anjan Poudel, president of Nepal Stockbrokers’ Association.
5 new stockbrokers
The Securities Board of Nepal (Sebon) granted licenses to five new stockbrokers on Thursday. Sunny Securities, South Asian Bulls, Lynch Stock Market, Imperial Securities and Creative Securities have been given licenses as they have completed putting together the infrastructure and human resources after opening their offices, said Sebon in a press statement.
Market over the week
Date >> stock index >> change in pts
June 15 >> 292.32 >> -5.31
June 16 >> 303.53 >> 11.21
June 19 >> 318.99 >> 15.46
June 20 >> 330.77 >> 11.78
June 21 >> 344.22 >> 13.45
June 23 >> 364.4 >> 20.18
Source: Kantipur
