Mon, Oct 8, 2018 3:40 PM
Nepal Stock Exchange (NEPSE) was established on 1983 and over the course of 35 years, has there been a remarkable change in the demography of capital market participants? We could say yes, we could say no but what really matters right now is, “Is it going to change in the foreseeable future?”
The advancement in technology and increased dedication from the various market participants like the NEPSE, CDS and clearing, SEBON, Brokers and Investors has surely made a difference. From the rudimental open-outcry system, we are now about to step in the age of online trading and to making it even more easy CDS and Clearing has played a significant role by introducing ASBA, followed by C-ASBA, De-mat account, Mero Share and now the e-DIS system. All these advancement has really opened up avenues for new investors to enter the market and eased up the procedure for existing investors. But the question is where are those new investors coming from?
Since we still don’t have an investor ID system we do not have the exact status of how many active investors are there in the market. From the total investors, how many transact on a daily basis and how many are occasional traders is a mystery. Nonetheless, what we have seen in the market is the lack of involvement of young generation.
“Aaja kaa yuva voli kaa karnadhar hun” (Today’s youth are the leaders of tomorrow). As true as this statement is, does this apply in stock market too? In most colleges, when asked about their aim majority of answer revolves around a banker, an entrepreneur, a civil servant, family business or foreign employment. We so get an occasional “investor” but that is proportionately very low to what one might expect. However my view or your view may be skewed, so to quench our curiosity here are the views of students currently enrolled in various business colleges regarding capital market.
Although being in a business school we know so little about the stock market. While studying BBA, we studied about capital market, stock market, beta calculation, we even had entire subjects called “Investment Decisions” and “Financial Market and Institutions” but the irony is, what we learnt were bookish knowledge and despite what we said in our interviews for admission we had no knowledge whatsoever regarding capital market and how it functions. So we started with few basic questions: Are you interested in capital market to be an investor? Who do you think has a major role to play in order to pique the interest of the students -- the colleges, SEBON or students themselves?
Utsav Dahal from SAIM College - MBA(Global Business), says,“I’m very interested to be an investor. I even have some idle cash to begin but I don’t have any idea about what to do and how to do. Once I even took a class to begin, but unlike what I had expected it was a commodity market class. Since I had already joined I took the classes to see how it happened, but the deeper I went it felt more like gambling then investing. So I left it.” When asked who should take the initiative between students, colleges or SEBON he says, “I think SEBON should do seminars at colleges to introduce students to the market.”
Similarly, Shweta Hada currently enrolled at Ace Institute of Management (MBA) with BBA from KUSOM says, “I have very little knowledge about the stock market, but looking forward to invest a little.”
Nikima Shahi, currently studying MBA at KUSOM, says, “I’m not much interested as such but I do know someone from my class who is. He is keenly involved and in fact knows a lot about stock market. But if you are asking how more students can be attracted towards this sector then I think simulation programs would be very effective. Recently there was a stock market simulation competition in KUSOM and I think that generated a lot of curiosity among the students. So more of those kinds of seminars and competitions will be very helpful.”
Similarly, Samip Thakali, preparing for the final exam of Chartered Accountancy and working at Dev Associates, says, “I wasn’t interested in stock market as such but being in this field it came in our daily conversations among friends and slowly my interest also increased. However I haven’t invested in stock till date, I had applied for some IPO but never got allotted. If I had enough funds then I’d love to make some investment. To be precise I’m more attracted towards derivative market more than stock. When I see the situation out there currently, I think colleges’ role is more important to generate awareness and create influence. SEBON’s influence is also important but I think college had a greater part to play.” Adding to his opinion Mr Thakali says, “Since we’re young and don’t have much disposable fund, we are inclined towards infrequent investment and more safer instruments and maybe that is why I haven’t yet met anyone of my age at secondary market.”
Preity Bhattarai, currently a management trainee at SBI Bank a graduate of Masters in Finance from TU, says, “The extent of my awareness regarding stock market is what I hear from the seniors and it our formal education was very limited in relation to what the market really is and the contingency factors that affect it. I have started investing in secondary market and the stocks that I choose are suggestions from my seniors. Currently my biggest dilemma is - When to sell it and what if when I need cash the price goes below what I bought at? So I think if I had known how macroeconomic factors could also affect market value, which could have changed the decisions I made. If we see it more closely than more than SEBON, colleges have a crucial role to play. They can adjust their syllabus according to Nepal’s context and send students to actual market for observation and analysis. This could really create some spark.”
The physics graduate, Krishna Khatiwada, says, "Although being from science background now I am in this field because of my interest and my fascination towards this sector. The educational background and the regulatory body's role surely does count but most of all I feel like it's the individual's interest. If it's meant to be, then one way or other we end up on the paths we are destined to."
From the variety of views from variety of people what we’ve come to deduce is, the lack of awareness can be attributed to narrow scope of market and no sync between college syllabus and actual market happenings. Similarly among the ones who are aware doesn’t seem to participate because first of all, the lack of funds and second of all difficulty in understanding. Whatever the reason, we still feel the need to acknowledge that it's important that youngsters also are aware of Nepal's capital market. It might not directly lead them to market, but this surely will add merchant banking to the list of aspirations. Similarly, Portfolio Management Services still needs a lot of exploration and promotion and having young blood could be the strength we're looking for.