6 Reasons for Nepse to rising 54.31 points | ‘Positive Vibrant’ in the Stock Market
Nepse has been steadily rising since Nepali Congress President Sher Bahadur Deuba became the Prime Minister on July 13. On the day the new government was formed, Nepse had risen to 2871.03 points. After that, Nepse has continued to rise and reached 3058.63 points till Sunday. Nepse has reached an all-time high.
Investors have estimated that Nepse will continue to rise. Rajan Lamsal, general secretary of the Nepal Investors Forum, an organization of investors, said that the stock market is likely to rise for six reasons.
“The first reason is that Nepse was on the Variety train for a long time. It has been on the bullish train for some time now,” he said.
The lack of liquidity does not seem to be immediate as the government has spent heavily at the end of the last fiscal year and the money spent has come into the banking system. As long as the amount invested is sufficient in the banking system, the bank’s interest rate is not likely to increase.
Lamsal said that the rise in the second stock market was due to the fact that there was sufficient liquidity in the market and that it did not cause any problem for the banks to flow loans. “Liquidity is very comfortable,” he said, adding that “it has helped the market grow.”
The third reason for the rise in Nepse is the formation of a government led by a democratic party, which has encouraged investors to invest in the stock market. “Even though the finance minister is Janardhan Sharma, the leader of the CPN-Maoist center, the formation of a government led by the Democratic Party has attracted investors to the stock market,” Lamsal said.
Similarly, the fourth reason is that more and more investors have started investing in the stock market recently. The rise in Nepse is also due to the fact that the stock market is an attractive area for investment. “Investors in the stock market have risen massively,” Lamsal said. “That’s why the market has risen.”
The fifth reason for the rise in the stock market is that the companies listed in Nepse are preparing to make public their financial statements till the end of the last fiscal year. “All the reports listed on Nepse came just in time,” he said. “The fourth-quarter financial statements have been leaking to the market, so the market has started to grow.” The rise in Nepse is also due to the fact that the companies listed in Nepse can pay more and more dividends in the last fiscal year.
The sixth reason is that the sub-index of the banking group had not increased before. However, Lamsal said that the bank’s share price has started rising recently and that has pushed the overall Nepse up.
Due to these and similar reasons, investors have been predicting that Nepse will rise for some time to come. Not only investors but also economists have started saying that there is a possibility of some improvement in the country’s economy.
The economy is set to pick up again after the Supreme Court reconstituted the House of Representatives. The economy was expected to decline as then-Prime Minister KP Sharma Oli dissolved parliament and went to the polls without recovering from the coronavirus.
But with the Supreme Court’s decision to reconstitute parliament, the economy is likely to pick up. The restoration of the parliament has given a positive message to the economy. Shankar Sharma said.
If the election had taken place, corruption would have increased. However, that too will be stopped to some extent, said economist Sharma.
Similarly, if the election had taken place, there would have been a wave of staff transfers. The transfer of staff was likely to lead to a situation where people’s work was not done on time and this would lead to instability.
Economists had predicted that the country would not be able to afford the huge cost of elections at a time when the coronavirus was rampant and the economy would reach a stagnant state. However, he acknowledged that their numbers were not enough to defeat the government.
Meanwhile, economists have predicted that the stock market, which is seen as a mirror of the economy, will go into a positive mode with the restoration of the parliament.