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Booming security market

 Security market was most ignored investment avenue, what are those reason that hyped this avenue from 293 to 2823.06 Nepse Index?

The trading trend in Nepalese capital market is bit different from world capital market. People invest on share seeking for bonus and right share since Nepalese share has return only once in a fiscal year that is, dividend. People are more inclined to fix deposit account of banks and financial institute than securities market as interest rate is higher than return from capital market.

Most of the country's 50% and more securities in Capital market are transact for government securities but in our case this doesn't stand true. BFIs have dominant in security market. Negative comments, NEPSE inefficiency, NRB regulation regarding margin lending policy, unaware people, and more investment in import and gold business and weak online trading backlash the Nepalese share market. 



The increment in capital requirement of A,B and C BFIs as fixed by NRB on FY 2072/73 has increased share market unnaturally in expectation of bonus and right share in future. Similarly, one year now the NEPSE index is regularly going up, those reasons are:

a) Excessive use of internet and E- WOM (electronic word of mouth).

b) Capital market came as only investment avenue during COVID-19 lockdown.

c) Only 7.5% capital gain tax on income from share. 

d) Leisure offered by COVID-19 gave enough time to common people check on share trading. This increased people's level of awareness to much better.

e) No import business since border is sealed. 

f) Improved online trading platform.

g) More approval from SEBON (security exchange board of Nepal) to private entity to go for public.

h) Excessive hike in gold price (above NPR. 1 lakh per tola) brought more volatility in gold investment.

i) BFIs advertise and offer demat account opening with account opening widely.

j) Large public offering from Nepal Infrastructure Bank ltd. (NIFRA)

K) More positive comments from ministers, prominent economist, bankers, etc.


HAPPY READING!



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