EXPERT SPEAKS: No reason for market to crash; mutual funds to help create demand

• Dhurba Timilsina

             Chief Executive Officer, Siddhartha Capital Limited A degree of fear was created by rumors related to some policies at a time when the market was in the correction phase. But the regulators have already cleared the air about the rumors. Despite this the market, which is fundamentally strong, has been falling. This is strange and needs to be examined critically. Even if the political development may not be very encouraging, it is much better than what it was in the past few years. Hence, I don’t see any valid reason for the market to fall at this point except for one reason that many investors, especially the new ones, have not been able to regain confidence. At the same time, I also do not buy to the idea that some big players are bringing the market down. I don’t see any evidence of that. Even if some of them are trying to pull the market down, they simply cannot do so given the size of the market now. In my opinion, what is happening now is that the investors, mostly the newer general investors, who form the large chuck of investment in the market, are panicking, and this is affecting the market seriously. Though there is a lot of supply of stocks in the market, including those from the promoter share conversions, I strongly believe if only general investors stop going after rumors and analyze the fact that there are no solid reason for the market to fall, they will regain confidence. Unlike many stakeholders who basically blame the regulators for the market downfall, I think the regulators have been largely positive about the market growth – except for somewhat delay on their part to clarify some rumors that affected the market. Nonetheless, the central bank has time and again refuted the rumors about the held-for-trading stocks and marginal lending. Nepse has been speeding up the infrastructure for online trading, and full-fledged CDS operation over the recent months. Sebon has been promoting mutual funds by approving such schemes one after another recently. Sebon approved NMB Bank’s mutual fund yesterday. Our second scheme (SEOS) has been listed today itself. NIBL is about to launch its scheme. More mutual funds are in the pipeline. Portfolio managers are also coming up slowly. Remember mutual funds have been introduced to give depth to the market. We continue to take buying positions – even today. As a mutual fund operator, we are about to make another Rs 60 to  Rs 70 crore investment in the stock market. NMB will also be investing heavily. Nabil’s scheme has been investing, NIBL will also invest. We are confident that the Sebon will soon approve the mutual funds in the pipeline so that we can invest more in the market.    (Siddhartha Capital Limited has two mutual funds in the market – SIG1, which has been posting impressive profit and SEOS, which has been recently launched. )