Hopeful signals for stock market

By R.K.Regmee

Capital market investors felt relieved this past week when Nepal Stock Exchange did not show any nervous symptom over the much talked instability that most feared the UNMIN's exit would trigger because of vacuum in supervision of Maoist combatants and arms in cantonments. Its index did not crash; it recorded a gain of 3.78 points while closing at 406.90 points while building on the positive note of previous two weeks.

When viewed against the history of NEPSE's sensitivity to political uncertainty, the positive signal received in share market in the past week could be termed as important. Investors moved forward as if they knew in advance about the Saturday's smooth timely transfer of the combatants and their arms from Maoists to the Special Committee chaired by the Head of government.

The gain should also be studied in the backdrop of the anxiety expressed publicly by donors in the past week over government's failure to finalize its strategy to support their Nepal Peace and Development Strategy 2010 -15 announced recently. The Three Year Plan (2010-13) that was to be implemented from the beginning of current fiscal year seven months ago is not ready yet.

Speculations that usually visit the time of second quarter results have definitely contributed to the gain of NEPSE. The high value that Nepal Telecom shares lured in the week had its own impact on the uptrend. The 8.20 percent decline in turnover during the period, according to analysts, is just the phenomenon that the secondary market has been showing from time to time.

On the first day, Jan 16 Sunday, NEPSE opened with positive gain of 0.37 point to close at 403.12 points. This was steadily followed throughout the week: moving towards 403. 71 points on Monday, 403.46 on Tuesday, 404.33 on Wednesday and 406.90 points on Thursday. The uptrend did not get disturbed even by NEPSE workers' protest over drawing the management attention to their grievances.

Optimism

Hopeful signals emerged from NEPSE premises as the news on the five -year plan specially focused on developing securities market in Nepal got aired and published. A nine-member steering committee and advisory groups under the chairmanship of the Securities Board of Nepal (SEBON) is promptly in place to create policies to formulate such scheme that would, hopefully, ensure long term and short term interest of capital market.

The securities market regulator plans to develop the master plan for developing domestic securities market with the technical assistance of World Bank. International stock market expert Richard Pratt from World Bank has prepared a market assessment report to this effect. The steering committee will review it and suggest to Pratt.

Investors believe the plan would produce a road map for the capital market in the country besides enriching the experience and structure that Nepal has already gained and built up over the decade and a half. nepalnews.com Jan 23