As the government prepares to unveil budget for the next fiscal year, the Nepal Stock Exchange (Nepse) index is rising by leaps and bounds.
The benchmark index rose by 13.49 points on Sunday -- the first trading day of the week -- to settle at 986.34 points. The Nepse index had logged gains of 29.37 last week.
Stock brokers say that the spectacular rise of the benchmark index in the run up to the budget preparation reflects the positive sentiment at the country´s only bourse.
“The market has responded positively to the government led by political parties advocating liberal economic policies. Investors have great faith on the incumbent finance minister as he has deep knowledge of the capital market and frequently says Nepse index reflects investors´ confidence,” Anjan Raj Poudyal of Thrive Brokerage House told Republica. “As the date for unveiling budget approaches nearer, the market is on an upward swing.”
The government is likely to introduce the budget for the fiscal year 2014/15 in the parliament in the second week of this month.
“Investors are expecting the government to slash capital gains tax (CGT) levied on share transactions, open the capital market for Non-Resident Nepalis (NRNs), and start full-fledged operation of the central depository system (CDS),” Poudyal said, adding, “Investors hope the budget would give a boost to the secondary market.”
At present, investors have to pay 5 percent CGT on share transactions. Similarly, the government is mulling over making amendment to the Foreign Investment Policy 2014 for allowing NRNs to invest in the capital market.
According to Poudyal, institutional investment in the capital market has contributed significantly in the growth. “Entry of mutual funds in the market has also fuelled growth,” he added.
Narendra Sijapati, president of Stock Brokers Association of Nepal (SBAN), agrees with Poudyal. “Liquidity surplus of the BFIs have made it easier for the investors to get loans at as low as 10 percent,” he said, adding that the benchmark index is on the way to touch the 1,000-point mark. “Nepse will touch the 1,000-point mark by next week. It will cross the all-time record of 1,175 points in the new fiscal year,” he predicted.
The benchmark index had plunged to an all-time low of 292.31 points on June 15, 2011 after climbing to the record high of 1,175.38 points on August 31, 2008. However, the market had bounced back following the successful Constituent Assembly (CA) last year.
All the trading groups ended on the green zone on the day with Insurance sector posting the highest gain. The Insurance sub-index gained 187.69 points to close at 4,445.98 points.
“Investors are after the Insurance stocks because of handsome dividends announced by most of the insurance companies as well as speculation about rise in paid-up requirement for life and non-life insurance companies to Rs 2 billion and Rs 1 billion, respectively, from the next fiscal year,” said Sijapati.
A total of 1.7 million units of shares of 146 companies worth Rs 691.22 million changed hands through 4,057 transactions on Sunday.
source: republica,6 july 2014
LINK
The benchmark index rose by 13.49 points on Sunday -- the first trading day of the week -- to settle at 986.34 points. The Nepse index had logged gains of 29.37 last week.
Stock brokers say that the spectacular rise of the benchmark index in the run up to the budget preparation reflects the positive sentiment at the country´s only bourse.
“The market has responded positively to the government led by political parties advocating liberal economic policies. Investors have great faith on the incumbent finance minister as he has deep knowledge of the capital market and frequently says Nepse index reflects investors´ confidence,” Anjan Raj Poudyal of Thrive Brokerage House told Republica. “As the date for unveiling budget approaches nearer, the market is on an upward swing.”
The government is likely to introduce the budget for the fiscal year 2014/15 in the parliament in the second week of this month.
“Investors are expecting the government to slash capital gains tax (CGT) levied on share transactions, open the capital market for Non-Resident Nepalis (NRNs), and start full-fledged operation of the central depository system (CDS),” Poudyal said, adding, “Investors hope the budget would give a boost to the secondary market.”
At present, investors have to pay 5 percent CGT on share transactions. Similarly, the government is mulling over making amendment to the Foreign Investment Policy 2014 for allowing NRNs to invest in the capital market.
According to Poudyal, institutional investment in the capital market has contributed significantly in the growth. “Entry of mutual funds in the market has also fuelled growth,” he added.
Narendra Sijapati, president of Stock Brokers Association of Nepal (SBAN), agrees with Poudyal. “Liquidity surplus of the BFIs have made it easier for the investors to get loans at as low as 10 percent,” he said, adding that the benchmark index is on the way to touch the 1,000-point mark. “Nepse will touch the 1,000-point mark by next week. It will cross the all-time record of 1,175 points in the new fiscal year,” he predicted.
The benchmark index had plunged to an all-time low of 292.31 points on June 15, 2011 after climbing to the record high of 1,175.38 points on August 31, 2008. However, the market had bounced back following the successful Constituent Assembly (CA) last year.
All the trading groups ended on the green zone on the day with Insurance sector posting the highest gain. The Insurance sub-index gained 187.69 points to close at 4,445.98 points.
“Investors are after the Insurance stocks because of handsome dividends announced by most of the insurance companies as well as speculation about rise in paid-up requirement for life and non-life insurance companies to Rs 2 billion and Rs 1 billion, respectively, from the next fiscal year,” said Sijapati.
A total of 1.7 million units of shares of 146 companies worth Rs 691.22 million changed hands through 4,057 transactions on Sunday.
source: republica,6 july 2014
LINK
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