Stock Market and Painful Investment in Nepal
Stock market is one of the major financial markets of the State and has it's direct relationship with the State's economy. Changes in the economy have a large impact on interest rates and inflation which affects the stock or bond markets. Thus, Stock market is often observed as an indicator or the mirror of economic growth and development of the Country.
So, what reflection does Nepalese Stock Market has on State's economy and development? It's 468 NEPSE Index!
Does it really indicate the worst economic scenario and falling development of the State? The answer is "NO"
Considering Nepal Stock Market as an economic indicator would be nothing but a blunder because the Nepalese Stock Market graphs little on the function of demand and supply or in the crawling development of the State but draws more on the pooling and the matching of so called big investors and other investing groups who are engaged in conducting malpractices. Stock market being a sensitive fraction of economy and a State's financial vertebral column yet can be easily influenced by market thugs for their personal benefits. But, the most disappointing scene comes to view when the Government fails to act against them or wedge loop holes, but rather observes the stock market with an unconstructive vision and labels it as a gambling house. And the Central Bank adds a little more by blindly imposing new clauses to demoralize investors and to slow down the market pace.
This unnatural and an uncommon market correction practice of NRB which has been observed in past years with a frequent change over marginal loan clauses and monitory policies specially in the bullish period clearly signifies the pessimistic outlook of the Government towards the Stock Market. Furthermore, the clinging market holds itself hard below the 500 index for several months suffocating many small investors, whereas no responsible bodies have shown its keen interest for markets recompense even by providing temporary flexibility in the clauses or by providing some other possible ways to grant a relief. Similarly, the weak management and irresponsibility of Nepal Stock Exchange and Central Bank can be observe when it blindly ignores the correlation of the primary and the secondary market as it repeatedly grants permission to offer IPO's even when the secondary market struggles in its bearish age. If only IPO's are proffered in a systematic and a scientific way understanding the situation of secondary market then sudden drop in stock's graph can be minimized which is obligatory and a relief doer for both big and small investors.
Stock market is an undeniable part of State's economy and its negligence can severely harm the State and the people. The best case would perhaps be the Wall Street Crash of 1929-1932 in United States. This rapid decline in the stock markets severely affected business and investors and customers confidence. It also caused banks to lose money and this crash was undoubtedly a key factor that contributed to the length and severity of the Great Depression in USA. But, still after such a long time of market crash Government and other responsible bodies are engaged in their internal conflict which is heartbreaking.
Although, the news of introducing Central depository system (CDS) and new brokers in recent future has uplifted investor's expectation with its promising output the story still seems to have a long wait. Central depository system (CDS) is a better way for stock management which will eventually replace the current but traditional practice of holding and moving the share scrip physically and a complete computerized based data entry system which will finally cut off the possibilities of scrip misplaced and lost or forged. But, with the new custom there are new challenges too. Government should work on building awareness as this system is new and although it will be an ease for young investors but can be sophisticated to those aged investors who are not familiar with computer system. So, the question arises if the Government and the stock market can monitor or handle this CDS as it has been expected by the consumers?
Furthermore, the hassle that small investors are facing from the stock brokers are expected to be minimized with the admission of new brokers which has though brought a great relief for small investors but the State going through its own internal clash it looks like small investors have to face some more days of hopeless attitudes of cunning brokers.
We hope the future government will help in making our Stock Exchange a better and a safe investing place clearing the loop holes and taking strong actions against malpractices giving stock market an economic standard and not a Gambling House.
So, what reflection does Nepalese Stock Market has on State's economy and development? It's 468 NEPSE Index!
Does it really indicate the worst economic scenario and falling development of the State? The answer is "NO"
Considering Nepal Stock Market as an economic indicator would be nothing but a blunder because the Nepalese Stock Market graphs little on the function of demand and supply or in the crawling development of the State but draws more on the pooling and the matching of so called big investors and other investing groups who are engaged in conducting malpractices. Stock market being a sensitive fraction of economy and a State's financial vertebral column yet can be easily influenced by market thugs for their personal benefits. But, the most disappointing scene comes to view when the Government fails to act against them or wedge loop holes, but rather observes the stock market with an unconstructive vision and labels it as a gambling house. And the Central Bank adds a little more by blindly imposing new clauses to demoralize investors and to slow down the market pace.
This unnatural and an uncommon market correction practice of NRB which has been observed in past years with a frequent change over marginal loan clauses and monitory policies specially in the bullish period clearly signifies the pessimistic outlook of the Government towards the Stock Market. Furthermore, the clinging market holds itself hard below the 500 index for several months suffocating many small investors, whereas no responsible bodies have shown its keen interest for markets recompense even by providing temporary flexibility in the clauses or by providing some other possible ways to grant a relief. Similarly, the weak management and irresponsibility of Nepal Stock Exchange and Central Bank can be observe when it blindly ignores the correlation of the primary and the secondary market as it repeatedly grants permission to offer IPO's even when the secondary market struggles in its bearish age. If only IPO's are proffered in a systematic and a scientific way understanding the situation of secondary market then sudden drop in stock's graph can be minimized which is obligatory and a relief doer for both big and small investors.
Stock market is an undeniable part of State's economy and its negligence can severely harm the State and the people. The best case would perhaps be the Wall Street Crash of 1929-1932 in United States. This rapid decline in the stock markets severely affected business and investors and customers confidence. It also caused banks to lose money and this crash was undoubtedly a key factor that contributed to the length and severity of the Great Depression in USA. But, still after such a long time of market crash Government and other responsible bodies are engaged in their internal conflict which is heartbreaking.
Although, the news of introducing Central depository system (CDS) and new brokers in recent future has uplifted investor's expectation with its promising output the story still seems to have a long wait. Central depository system (CDS) is a better way for stock management which will eventually replace the current but traditional practice of holding and moving the share scrip physically and a complete computerized based data entry system which will finally cut off the possibilities of scrip misplaced and lost or forged. But, with the new custom there are new challenges too. Government should work on building awareness as this system is new and although it will be an ease for young investors but can be sophisticated to those aged investors who are not familiar with computer system. So, the question arises if the Government and the stock market can monitor or handle this CDS as it has been expected by the consumers?
Furthermore, the hassle that small investors are facing from the stock brokers are expected to be minimized with the admission of new brokers which has though brought a great relief for small investors but the State going through its own internal clash it looks like small investors have to face some more days of hopeless attitudes of cunning brokers.
We hope the future government will help in making our Stock Exchange a better and a safe investing place clearing the loop holes and taking strong actions against malpractices giving stock market an economic standard and not a Gambling House.
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