KATHMANDU: The second week of the Nepali month of Mangsir brought good news for the stock market.
From Mangsir 9 to 13, the Nepal Stock Exchange (NEPSE) rose by 67.61 points, marking a positive week for investors.
During the same week, the Nepal Securities Board (SEBON) appointed a new Chairman after an 11-month vacancy.
Santosh Narayan Shrestha’s appointment seemed to be welcomed by investors, as indicated by the positive market trend.
The NEPSE index, which was at 2,680.44 points on Thursday of last week, rose to 2,748.05 points this week.
The market operated for five full days, during which it fell on two days and rose on three.
Despite the occasional declines, the overall market increased by 67 points, as it gained more than it lost.
A total of more than Rs 38.89 billion worth of shares were traded during the week, with an average daily transaction of over Rs 7.77 billion.
In total, 67.866 million shares were traded across the five days, averaging 13.737 million shares per day.
Investors remain cautious
Santosh Narayan Shrestha was appointed as the new Chairman of SEBON after an 11-month vacancy.
While investors generally welcomed his appointment, the enthusiasm that typically accompanies such a change in leadership was notably absent.
Unlike the surge of optimism seen when Bishnu Poudel was appointed as Finance Minister, Shrestha’s appointment has not sparked a similar wave of bullish sentiment in the market.
Although Shrestha’s entry has been met with some positive reception, it hasn’t led to the expected boost in the NEPSE index.
Currently, 77 companies are awaiting approval for their IPO issuances at SEBON.
There are also discussions surrounding the creation of a new stock exchange.
Investors are waiting to see how Shrestha will address these issues before making further moves. Many investors are adopting a “wait-and-see” approach, looking for clarity on his policies.
There is concern among investors that the future issuance of IPOs might include companies with weak financial conditions, influenced by the interests of traders and certain lobbying groups. Investors fear this could negatively affect the market in the long run.
Since Shrestha’s appointment, there has been little positive commentary in the market.
Speculation suggests that his appointment may have been influenced by financial groups looking to block the approval of a new stock exchange and by traders who may want to sell shares of weak companies at premium prices.
The stock market remains volatile due to rumors, both internal and external, that continue to affect investor sentiment.
No enthusiasm yet, investors wait and watch
“Even though the Chairman has been appointed to the Board, there is no enthusiasm among investors, nor is there any disappointment,” investor Nawaraj Dahal told Khabarhub. “Investors are currently in a wait-and-see mode.”
Dahal added that investors may become more optimistic if the new Chairman of SEBON introduces policies to improve the capital market.
However, he emphasized that enthusiasm cannot build without understanding the chairman’s approach and behavior.
Subash Chandra Bhattarai, another investor, echoed Dahal’s views. Bhattarai noted that investors are currently observing Santosh Narayan Shrestha, who has recently taken charge as SEBON chairman.
“There are talks of a new stock exchange, and 77 companies are waiting to issue IPOs,” said Bhattarai. “A lot will depend on the policies the chairman adopts regarding these matters.”
Bhattarai believes that it will only be possible to gauge whether there is enthusiasm or disappointment based on the chairman’s actions moving forward.
He pointed out that the recent review of the monetary policy, which largely maintained the old policies, did not bring any excitement to the market.
“While there has been a lot of chatter on social media,” Bhattarai said, “the continuation of the old policy suggests stability, so the monetary policy should be taken positively. However, if it doesn’t meet investor expectations, it could lead to disappointment.”
Tulsiram Dhakal, Chairman of the Investors Forum, stated that the Board should view the appointment of a new chairman as an opportunity to rekindle enthusiasm after many months of vacancy.
However, Dhakal believes that the chairman faces both challenges and opportunities.
He stressed that before making any policy decisions, the board should consult with experts and investors.
“The SEBON Chairman must work to restore investor enthusiasm,” Dhakal said.
“The government will need to take initiatives on several fronts, and the board chairman’s role goes beyond merely approving IPOs and rights issues.”
Dhakal also criticized the recent monetary policy for disappointing investors.
“Investors had high expectations from the monetary policy review,” he said, “but the review took a negative turn, which has not helped the market.”
Weekly market overview
The stock market had a mixed week, with five days of trading. The market opened on a down note on Sunday, with the NEPSE index falling by 13 points, or 0.48%.
The index reached a high of 2,698.76 points and a low of 2,661.22 points.
By the end of the day, the NEPSE closed at 2,667.40 points. On that day, 13,412,260 shares worth NPR 7.59 billion were traded across 75,288 transactions.
On Monday, the market recovered slightly, rising by 15.83 points, or 0.59%.
The NEPSE reached a high of 2,698.76 points and a low of 2,661.21 points. Despite the rise, trading volume decreased compared to Sunday, with 18,880,597 shares worth NPR 6.29 billion traded across 64,882 transactions.
Tuesday saw the market continue its upward trend, with the NEPSE rising by 33.41 points, or 1.24%, to reach 2,716.66 points.
The index peaked at 2,719.84 points and dropped to a low of 2,685.64 points. Trading volume increased, with 12,228,546 shares worth NPR 7.36 billion traded across 74,568 transactions.
Wednesday brought further gains, with the NEPSE climbing by 39.70 points, or 1.46%, to reach 2,756.36 points.
The index hit a high of 2,756.36 points and a low of 2,721.35 points. The market saw strong trading activity, with 15,786,881 shares worth NPR 9.18 billion traded across 88,105 transactions.
However, after three consecutive days of growth, the market took a slight dip on Thursday.
The NEPSE fell by 8.30 points, or 0.30%, closing at 2,748.05 points. The index peaked at 2,774.14 points and dropped to a low of 2,738.80 points.
Trading volume decreased to 14,858,889 shares worth NPR 8.45 billion across 82,130 transactions.
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