back
mega bank Ad
Hero Ad

Bull run may mean time to pull in horns

KATHMANDU. Daily transaction at Nepal Stock Exchange (Nepse) for the last 19 days has been hitting over Rs 1 billion mark, forcing the Securities Board of Nepal (Sebon), the regulator, to ask investors to be cautious and think twice before investing.

The bullish run at the domestic secondary market at a time when the country’s macro-economic fundamentals are not in good position has baffled many. On Sunday, transaction at Nepse almost reached Rs 2 billion mark.

Despite the Sebon warning, investors have been making a beeline for the country’s sole stock market, largely in the wake of announcements of right share issuances of financial institutions and capital increment plan of insurance and micro-finance companies.

Investors have been buying stocks of insurance companies, micro-finance companies and commercial banks, leading to a surge in the stock market.

Over the said period, the Nepse index also surged 113.81 points to close at a record high 1,609.59 points on Monday.

Along with the rise in index and transaction volume, the number of traded shares has also gone up. During this period, average daily traded shares stood at 2.15 million units in an indication that people are aggressively selling and buying stocks.

The capital increment plan of the financial institutions and insurance companies is one of the reasons for the bullish run at Nepse.

With one year left to boost their paid-up capital to Rs 8 billion as per Nepal Rastra Bank (NRB) directives, commercial banks have been issuing right shares to increase their capital.

Similarly, the Insurance Board has already asked life insurance companies to increase their capital base to Rs 5 billion from the existing Rs 500 million and non-life insurance companies to Rs 4 billion from the present Rs 250 million. This too has resulted in surge of stock price of insurance companies as well as their demand. Currently, investors’ priority is stocks of insurance companies, micro-finance and commercial banks.

Stock analysts said lucrative returns offered by stock market at a time when other sectors are performing

poorly, along with low interest rates offered by the banks, have pulled the investors towards the domestic secondary market.

“The rise in number of risk takers has led to increasing transaction volume in the secondary market,” said stock analyst Rabindra Bhattarai.

Stockbrokers echoed Bhattarai.

Pralhad Kumar Oli, managing director of Pragyan Securities, said new investors are coming into the capital market.

“Apart from individual investors and mutual funds, institutional investors too are coming into the capital market. Besides, traders and entrepreneurs are also investing,” he added.

Sebon Spokesperson Niraj Giri, however, said, “Investors should be cautious when the index alone continues to see a dramatic surge without any backup of transaction amount.”

The Kathmandu Post, 14 Jun, 2016, 8.00 am

वि.सं.२०७३ जेठ ३२ मंगलवार १०:५६ मा प्रकाशित

You can share this post!

सेजमा उद्योग स्थापनाका लागि आव्हान,दुई बर्षसम्म निर्यात गर्न नपर्ने

सेजमा उद्योग स्थापनाका लागि आव्हान,दुई बर्षसम्म निर्यात गर्न नपर्ने

वि.सं.२०७८ फागुन १५ आइतवार १३:१०

काठमाडौ । विशेष आर्थिक क्षेत्र प्राधिकरणले उद्योगीहरुलाई भैरहवा र बाराको...

एमसीसी संसदबाट व्याख्यात्मक टिप्पणी सहित पास गराउने सत्ता गठबन्धनको निर्णय,आजै पास हुने

एमसीसी संसदबाट व्याख्यात्मक टिप्पणी सहित पास गराउने सत्ता गठबन्धनको निर्णय,आजै पास हुने

वि.सं.२०७८ फागुन १५ आइतवार १२:०३

काठमाडौं । पाँच दलीय सत्ता गठबन्धनले अमेरिकी सहायता परियोजना एमसीसी...

रुस – युक्रेन द्वन्द्व प्रभावित नेपालीको सहयोग एवं उद्धारका लागि खड्काको नेतृत्वमा उच्चस्तरीय समिति गठन

रुस – युक्रेन द्वन्द्व प्रभावित नेपालीको सहयोग एवं उद्धारका लागि खड्काको नेतृत्वमा उच्चस्तरीय समिति गठन

वि.सं.२०७८ फागुन १५ आइतवार ११:४३

काठमाडौं । युक्रेन द्वन्द्व प्रभावित नेपालीको उद्धारको लागि सरकार र...

विद्युत प्राधिकरणले आइपीओ जारी गर्ने

विद्युत प्राधिकरणले आइपीओ जारी गर्ने

वि.सं.२०७८ फागुन १२ बिहीवार १४:४६

काठमाडौं । नेपाल विद्युत प्राधिकरणले पनि साधारण सेयर (आइपीओ) जारी...

घट्दो बैदेशिक मुद्रा संचितिले गभर्नरको निद हराम

घट्दो बैदेशिक मुद्रा संचितिले गभर्नरको निद हराम

वि.सं.२०७८ फागुन १२ बिहीवार ०९:४९

काठमाडौं । विदेशी मुद्रा (डलर) संंचिति घट्दै गएपछि गभर्नर महाप्रसाद...

पुर्वाधार विकास बैंकले उर्जा ऋणपत्र जारी गर्न पाउने

पुर्वाधार विकास बैंकले उर्जा ऋणपत्र जारी गर्न पाउने

वि.सं.२०७८ फागुन ११ बुधवार १८:१८

काठमाडौं । पुर्वाधार विकास बैंकले प्राथमिक पुँजीको शतप्रतिशत ऋणपत्र जारी...