Where is NEPSE index heading to? For me, the time NEPSE will create a new all time high is near

After being in a bearish trend for about 4 years, it was almost time for NEPSE to enter into the bullish trend and start a bullish journey. Some indicators were giving the signal that a bull run is imminent. Soon after that, we witnessed an upward rally in NEPSE which took the NEPSE index to 1632 on the 15^th of Falgun 2076, which further consolidated that the bull run is imminent. However, because of the coronavirus pandemic that shook the entire world, we saw a freefall in NEPSE which brought down the index to 1251 on the 9^th of Chaitra 2076. We had a freefall of around 25% while many global indices had a freefall of about 30 to 35% on average.

The global stock markets bounced back soon after the freefall but due to lack of infrastructure, the only stock market in our country was shut down during the lockdown (almost 3 months). After few provisions and directives from SEBON that would ease online trading, NEPSE opened its trading floor from the 15^th of Asar as per its usual operating procedure (the time and provisions for circuit breakers, which was amended when NEPSE was opened previously but it had to shut down again after 2 days as it was not practical). Another good thing was that the extra one hour which was introduced (before the lockdown) on a trial basis without any study was temporarily removed from the 15^th of Asar (it will not be implemented again for now).

I was very optimistic and sure that NEPSE will bounce back and return to its bullish track soon and resume its bullish journey which was delayed by the pandemic and the closure of NEPSE:

(https://www.sharesansar.com/newsdetail/nepal-stock-exchange-opening-its-trading-from-today-in-which-direction-will-nepse-index-move-now)

After few days of regular trading, we got a more clear view of the future journey of NEPSE and I was sure that that the bullish journey of NEPSE had begun:

(https://www.sharesansar.com/newsdetail/it-seems-to-me-that-the-bullish-journey-in-nepse-has-begun-are-you-ready)

The Nepal Stock Exchange (NEPSE) index is continuously moving upwards in its bullish journey and the index subsequently crossed the psychological mark of 1700. I am very much confident that the new all-time high of NEPSE is near. I have already mentioned in my previous articles why I was so confident about the upside movement of NEPSE. So, I would not be repeating those points and like to mention only a few (new) things here that have a huge potential to lift this market further upward:

1. We can see the average turnover is more than Rs. 300 crores with last day’s turnover before the Tihar holiday being 482 crores.
2. The NEPSE index closed at 1718 on the last trading day before the Tihar holiday, which is above the psychological level of 1700.
3. The pandemic has not affected the inflow of remittance as it was thought to be.
4. The interest rate and also the base rate of BFIs is decreasing gradually.
5. The country has got a new finance minister.
6. The primary market has reached almost all over Nepal and the number of participants has increased heavily. So we can expect the same for the secondary market in the future.
7. It has been quite some time that we have not witnessed problems in NOTS and TMS which would halt the trading.
8. Both buying and selling as well as payment of money and settlement of shares can be done by the investors from their home or workplace without the need to visit the broker office. This will help in attracting new investors.
9. The Nagarik Stock Dealer is said to enter the market after Tihar.
10. Economic activities except tourism have started to come back to normal which will help in reviving the economy.
11. The recent news that two companies Pfizer and Moderna have made huge breakthroughs in making the vaccine for the coronavirus which is about 90% and 95% effective respectively, has generated hope that the pandemic can be controlled.

On the basis of these points and points from my previous articles, I am very much confident about the future of NEPSE and sure that we will soon see a new all-time high. The future of NEPSE is very bright in the long run. We should look at every correction as a buying opportunity. But before making the investment decision, one must thoroughly study and research, do the due diligence, be well aware of one’s ‘risk appetite’ and try to minimize risks on the investments.

Disclaimer: This article is only my opinion and not investment advice, so DO NOT make your investment decisions on the basis of this article. Be cautious before investing money in the stock market as it is you who will have to bear the consequences (both profit and loss) of your investment.

Rojin Joshi - An avid and optimistic investor