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Small-time investors profiting on price fluctuations

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KATHMANDU, Feb 7: At a time when big investors, citing continued slump, are staying away from the stock market, small investors are taking to stock market trading with unprecedented enthusiasm.



This has helped Nepal Stock Exchange (Nepse) index to remain above 313 points. Stock brokers said they are witnessing a significant rise in the number of small investors.[break]



"More than 60 percent of investors frequenting our office these days are small investors. These investors are buying and selling stocks to take advantage of even small fluctuations in their prices," said Anjan Raj Poudel, president of Stock Brokers´ Association Nepal (SBAN).



Poudel said investors who are buying and selling shares in small quantities ranging from 10 units to 100 units per transaction, are increasing.



This new trend has provided a new lifeline to the stock market from prolonged slowdown. "Bulk traders are reluctant to either buy or sell shares, fearing possible loss in trading of shares amid uncertainty persisting in the stock market," said Poudel, who is also proprietor of Thrive Brokerage House.



"Even share of small investors in total transaction amount has increased to around 40 percent of the total daily turnover in the stock market, up from around 20-25 percent last year," said Poudel.



Chudamani Bhandari, a small-time investor from Parsa Bazar of Chitwan, said he has been frequenting to stock brokers to exchange shares and take advantage of fluctuations in the prices. "Small investors have no expectation of huge profits and they don´t fear of losses either as their investment is minimal. We are making a little benefit from small fluctuations in the share prices," said Bhandari, who has shares of around one dozen companies.



Despite huge losses that he has suffered on his investments of over Rs 6 million over a couple of years ago, he has been managing to make some profit in recent times by trading in shares on a small scale and benefiting on minor fluctuations in prices.



Like Bhandari, Ram Sharma of Kalimati, Kathmandu, is also buying and selling shares on a small scale to avoid risk of higher volume of loss like in bulk trading.



"I prefer to buy and sell shares in small numbers," said Sharma who has been investing in shares of over three dozen companies. Sharma has already invested over Rs 15 million in the stock market.



According to him, in addition to old investors, new investors are also trying their luck in the stock market by buying shares that have touched their rock bottom prices.


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