. With the formation of the new government under the leadership of Balen Shah, there has been a bearish trend in the stock market. Since Shah became the prime minister on March 26, there has been confusion and panic among the investors, leading to a fall in both the NEPSE index and market capitalization.
In the last one and a half months, the NEPSE index has decreased by 219.25 points.TAG_OPEN_div_43 Before the formation of the government, the NEPSE index fell to 2730.91 points from 2950.16 points on March 24.
Sagar Dhakal, president of Nepal Stock Brokers Association, has said that the interest of investors on the budget has increased.TAG_OPEN_div_41 According to him, investors are in a ‘wait and watch’ situation due to confusion about the economic policy and budget that will come with the change of government and what kind of policy will be brought in the capital market.
The index fell to the range of 2850-2879 points towards the end of March, but came under further pressure with the onset of April. On April 18, the NEPSE index fell to 2676.68 points. After that, the index recovered slightly and climbed back to 2866.87 points, but the rise was not sustainable.
Since mid-April, the NEPSE index seems to be gradually declining as the resale pressure has increased. At the end of the month, the index traded in a limited range of 2738 to 2770 points. With the beginning of May, the market came under further pressure and fell to 2704.08 points. It was.
The country’s total market capitalization has decreased significantly in the period of one and a half months. According to the data available, the market capitalization of the market capitalization has been limited to around Rs 4.657 billion as of May 15, which was worth Rs 5009.38 billion as of March 21. During this period, the market capitalization has shrunk by about Rs 3.51 trillion.
} Although there was a general improvement towards the end of March, the market remained volatile throughout the month of April. After a sharp decline in the first week of April, there was a gradual decline in the recovery for a few days. Although there was a short-term increase in mid-April, it did not have a long-term impact. With the end of April and the beginning of June, the market seems to be under pressure again.
According to sector experts, the decline in market capitalization is due to lack of investor confidence, policy uncertainty, and slowdown in overall economic activity.TAG_OPEN_div_33
“A new government has come. What kind of policies related to the stock market will be included in the next budget will determine the psychology of the investors. Therefore, there is no big movement in the market right now. ” he says. He said that a positive atmosphere would be seen in the share market if the budget presented a clear policy for capital market-friendly policy, reform in tax system and investment-friendly environment.
Similarly, the government has intensified investigations into money laundering, securities and insurance related offences in recent times.TAG_OPEN_span_28 As a result, there is fear and uncertainty among the industrialists. Investors believe that the impact of this has also been seen in the stock market. Experts in the sector say that there is no positive atmosphere in the share market as the government’s grip on industrialists and businessmen has demoralized the investors.
According to the current economic and financial situation, the stock market seems to be on a positive path. However, experts say that the stock market is not enthusiastic despite cheap interest rates, sufficient liquidity in the market, and less investment in other sectors. According to the data released by Nepal Rastra Bank (NRB), the average interest rate of the loan is 6.77 percent in the current fiscal year.
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