“How can we expect new investors to come into the share market which is witnessing the toughest of times thanks to a negative attitude of the government toward the capital market compounded by industrial insecurity in the country?” Rewat Bahadur Karki, general manager of Nepal Stock Exchange, the sole secondary market in the country, told myrepublica.com. [break]
“Arrival of new investors into the market has been almost nil for the last few weeks, given the increasing insecurity of investments, with the recent activities of the government creating panic among investors,” added Karki.
A couple of weeks back, Chiranjibi Nepal, chairman of the Securities Board of Nepal, had resigned citing the lack of an encouraging attitude on the part of government toward the share market. A few months back Finance Minister Dr. Babu Ram Bhattarai had publicly termed the share market a place for gambling.
Existing investors appear frustrated amid the discouraging economic environment and with the slack in the stock market keeping investment returns at bay.
The NEPSE index--a barometer of the share market-- that had touched a new high of over 1100 points last September has declined to 682 points, with about 5 points decline from a day earlier. Officials estimate that the number of investors had reached about 1.5 million from 1.2 million a couple of years earlier.
“I am worried about the fate of my investments as the price of shares I bought in the hope of fetching higher prices in future, has dropped drastically,” said Lunga Nath Dahal, an investor who came from Taplejung to play the share market after selling a shoe shop. Altogether he has invested around Rs 2.5 million in shares.
He is not the only one to encounter such a fate. Thousands of share holders who had put their money in the secondary market are in a dilemma over their investments.
Stock brokers who used to enjoy the hay day of the bullish period with crowd of investors rushing to their offices, are now feeling the brunt of the market slowdown.
According to them, new investors in the securities market have not been seen for the last few months amid the market uncertainty and confusion.
“I have not seen new investors in the share market and this at a time when the old ones are also looking for greener pasture,” said Nawaraj Pokharel, former president of the Stock Brokers’ Association.
The ongoing slack has repelled potential stock investors and discouraged the existing ones. Pokharel estimated that the volume of shares changing hands through 23 stock brokers has dwindled by 50 percent to a value of about Rs 60 million per day.
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