Here's What's Happening in Stock Exchanges of Nepal's Neighboring Countries

Article by Samin Gurung, Media Officer, Sharesansar

1) China

The Shanghai Stock Exchange (SSE) is a stock exchange based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in mainland China, the other being the Shenzhen Stock Exchange.

The Shanghai Stock Exchange is the world's 3rd largest stock market by market capitalization at US$6.975 trillion as of May 2021, (50973.12 billion RMB as of September 23.) It's Asia's biggest stock exchange. Unlike the Hong Kong Stock Exchange, the Shanghai Stock Exchange is still not entirely open to foreign investors and often affected by the decisions of the central government, due to capital account controls exercised by the Chinese mainland authorities.

The Shanghai Composite Index (SSE) has only gained about 6% in the year 2021.

Hot News 1: Stock markets have been tumbling globally for the past week over a number of jitters, but the main reason is China's potentially crumbling real estate market. A company called Evergrande is one of China's top 3 developers, and it played a big role in the country's infrastructure-driven growth. But the company was built in part on borrowed money. Evergrande's current debt stands at $300B, which is 2% of China's entire GDP.

Analysts claim the company is in no shape to repay the debt any time soon, without the government bailing it out. Evergrande’s Hong Kong-listed shares have tumbled nearly 90% since July 2020, as the Chinese government cracked down on speculation in the real estate market. The effects have spilled over to other parts of the economy, with analysts calling it 'China's Lehman.'

In other words, worries about highly indebted property developer China Evergrande’s ability to pay interest on its U.S. dollar-denominated bonds have prompted comparisons to the collapse of Lehman Brothers in 2008 and the subsequent financial crisis. However, when it comes to the scale of the potential impact on international financial markets, other analysts point to a major difference between the Evergrande crisis and the Lehman collapse: Evergrande holds land, while Lehman held financial assets.

Hot News 2: The US audit watchdog adopted a new rule on Wednesday that will help the board force companies flouting US audit regulations to delist from US exchanges, a move that threatens hundreds of Chinese businesses. The move is part of the broader financial decoupling from Beijing that Washington has pursued in recent years.

Furthermore, the US has banned American tech companies from doing business with scores of Chinese firms on a blacklist known as the Entity List maintained by the Commerce Department.

Hot News 3: China has announced plans to set up a third stock exchange to serve small and medium-sized businesses. President Xi Jinping said the new share market will be in the capital Beijing, during a speech to the International Fair for Trade in Services.

The regulator said that the registration system for the exchange would be similar to Shanghai's STAR market, which is seen as China's answer to the technology-heavy Nasdaq platform in the US.

2) India

BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange located on Dalal Street in Mumbai (Bombay). Established in 1875, it is the oldest stock exchange in South Asia.

Meanwhile, the National Stock Exchange of India Limited (NSE) is another leading stock exchange of India. It is under the ownership of leading financial institutions, banks, and Insurance companies. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered easy trading facilities to investors spread across the length and breadth of the country.

The benchmark equity indices on the BSE and National Stock Exchange (NSE) climbed over 1.5 percent higher to settle at fresh all-time highs this Thursday.

The S&P BSE Sensex rose 958.03 points (1.63 percent) to end at a record-closing high of 59,885.36. Earlier in the day, the BSE benchmark had surged 1,029.92 points (1.75 percent) to breach the 59,900-mark for the very first time and hit a fresh record intraday high of 59,957.25. This was in a large part led by buying across sectors and in heavyweight stocks such as Reliance Industries (RIL) and the HDFC twins- comprising of HDFC Bank and Housing Development Finance Corporation (HDFC).

At a broader look, the SENSEX has gained about 26% in the year 2021.

Hot News 1: Indian start-ups have raised $10 billion through IPOs so far this year — more money than was raised in the last three years. Based on Goldman Sachs’s calculations, as many as 150 private firms could potentially list on the stock market over the next 36 months, adding as much as $400 billion of market value.

Hot News 2: India became the world’s sixth-biggest stock market, overtaking France for the first time in market capitalization last week.

Hot News 3: SENSEX has surpassed the 60,000 index level for the first time in today's market session.

3) Bangladesh

The Dhaka Stock Exchange (DSE), located in Motijheel, Dhaka, is one of the two stock exchanges of Bangladesh, the other being the Chittagong Stock Exchange. The DSEX has surged 75 percent since the pandemic arrived on the shores of Bangladesh in March last year.

The exchange was first incorporated as East Pakistan Stock Exchange Association Ltd on 28 April 1954 and started formal trading in 1956.

As of 16 November 2009, the benchmark index of the Dhaka Stock Exchange (DSE) crossed 4000 points for the first time, setting another new high at 4148 points. In 2010, the index crossed 8500 points and finally crashed in the first quarter of 2011. Millions of investors lost their money and came out onto the street blaming the speculators and regulators for the bubble that finally burst in what became known as the 2011 Bangladesh share market scam.

Millions of investors were rendered bankrupt as a result of the market crash. The crash is believed to be caused artificially to benefit a handful of players at the expense of the big players.

Hot News 1: 70% of the stock market’s daily turnover comes from junk shares. The Bangladesh Securities and Exchange Commission treats it as an open secret that junk shares are highly risky, and that no one should buy this. But at the same time, BSEC does not terminate the ones they know to be junk shares, even after knowing the whole picture.

Hot News 2: Thirty-one Facebook pages were deactivated last week for spreading rumors about the stock market. The Facebook pages were blocked as per recommendations of an investigation team formed in May this year.

Hot News 3: The Bangladesh Securities and Exchange Commission this month abolished the over-the-counter market and sent 41 OTC companies to the small capital platform and alternative trading board of the country’s stock exchanges.

4) Pakistan

The Pakistan Stock Exchange (abbreviated as PSX) is a stock exchange in Pakistan with trading floors in Karachi, Islamabad, and Lahore. The PSX was established on 11 January 2016 after the merger of the Karachi Stock Exchange, Lahore Stock Exchange, and Islamabad Stock Exchange.

In January 2021 there were about 443 companies listed in PSX with a total market capitalization of PKR 8,736 billion (USD$52 billion).

The exchange's website denied access to the Sharesansar analyst when trying to enter the portal from a system with Nepal's address.

Hot News 1: Global investment research firm Morgan Stanley Capital International (MSCI) has decided to downgrade Pakistan's stock market from Emerging Market (EM) to Frontier Market (FM).

Hot News 2: Pakistan Stock Exchange's (PSX) benchmark KSE-100 index shed 1,243 points in intraday trading on Wednesday before bouncing back later in the day and more than halving its losses.

5) Bhutan

The Royal Securities Exchange of Bhutan is the only stock exchange in Bhutan. It is one of the world's smallest stock exchanges. Only 20 companies were listed as of July 2020.

It is located in the Royal Insurance Corporation of Bhutan (RICBL) building in Thimphu. Very little information about the exchange is public.

For nearly three decades, the Royal Securities Exchange of Bhutan was a sleepy place. Some stocks had not been traded since their market debuts. The market was closed more of the week than it was open. Volumes were so sluggish on South Asia's smallest exchange, no one even saw a need for an index.

Nonetheless, in recent times, with limited investment options to choose from, the country's expanding middle class has turned to stocks, spurring a trading boom that has been only partly dampened by the coronavirus pandemic. To improve public access, the Royal Securities Exchange of Bhutan has upgraded its systems to make company filings and real-time data available electronically.