The sluggish market we have been witnessing these days is an outcome of almost freefall we witnessed over the past few weeks largely due to unwanted and baseless rumors spread by some vested interest groups regarding the central bank circular on held-for-trading stock as well as tightening of the marginal lending. The market would have been surging at this time of the year had these unfortunate development not taken place. Now that the central bank has cleared the air surrounding these baseless rumors, the market is trying to grow, but it takes some time for general investors to regain confidence.
The market should rebound for a number of solid reasons. If we look at the trend over the past many years, the market becomes bullish toward the festive season of Dashain and Tihar. Hopefully the BFIs will propel the growth by announcing impressive dividend before Dashain though a few commercial banks have given mixed reaction to the investors (as Everest Bank has by and large disappointed the investors who were expected much more bonus share, Nabil has met general expectation). Even if the BFIs do not trigger the bullish surge, insurance companies, especially four companies – Nepal Life Insurance Company Limited, LIC Nepal, National Life and Asian Life – should drive the market forward before Tihar or just after it. I think the Nepse index will rebound toward 1,100 levels in the next two to three months.
(Agrawal has extensive experience of more than 17 years in the stock market of Nepal and was also associated with Broker Number 6, Agrawal Securities)
