NEPSE crosses 600-mark
Kantipur Report
KATHMANDU, July 4 - The rallying stock market gained further and crossed the 600-mark on Tuesday. But, analysts predicted the market will catch a bearish trend soon.
After opening at 598.52 points, Nepal Stock Exchange (NEPSE) ended at over 602 points, hitting an all-time high, at today's transactions. Officials attributed the rise to unreasonable exuberance shown by investors over future gains.
“We have already cautioned the investors. But, they do not seem to pay heed to what we say,” said Rewat Bahadur Karki, general manger of NEPSE. “Some people have spread rumors of persistent growth in share prices. Investors are just running after this rumor.”
The stock market has already gained staggering 225 points in its index over the last year amid investors' confidence that the banks are preparing to raise their paid-up capital will result in the issuance of bonus shares in a big way.
This, according to them, will push shares prices further up.
However, bankers said bonus shares issuance does not necessarily increase the per share value of the banks.
Since the beginning of the fiscal year, the market reported increment of over 65 billion rupees in market capitalization -- the value of the listed shares. That has happened despite the fact that the economic fundamentals are now weaker that it was then. Investment opportunities for banks, whose shares play determining role in price upheaval, have remained as squeezed as then. The import and export have also dwindled.
As the growth is not supported by corporate or economic fundamentals, the market may face meltdown anytime, analysts said.
An insider, who preferred not to be quoted, said some are manipulating prices.
“The supply of shares of any good listed company in the market is very low. The shares are already held by few big houses. Close on the heels of low availability of shares, people are easily able to manipulate prices,” he said.
Posted on: 2007-07-03 19:42:10 (Server Time)
KATHMANDU, July 4 - The rallying stock market gained further and crossed the 600-mark on Tuesday. But, analysts predicted the market will catch a bearish trend soon.
After opening at 598.52 points, Nepal Stock Exchange (NEPSE) ended at over 602 points, hitting an all-time high, at today's transactions. Officials attributed the rise to unreasonable exuberance shown by investors over future gains.
“We have already cautioned the investors. But, they do not seem to pay heed to what we say,” said Rewat Bahadur Karki, general manger of NEPSE. “Some people have spread rumors of persistent growth in share prices. Investors are just running after this rumor.”
The stock market has already gained staggering 225 points in its index over the last year amid investors' confidence that the banks are preparing to raise their paid-up capital will result in the issuance of bonus shares in a big way.
This, according to them, will push shares prices further up.
However, bankers said bonus shares issuance does not necessarily increase the per share value of the banks.
Since the beginning of the fiscal year, the market reported increment of over 65 billion rupees in market capitalization -- the value of the listed shares. That has happened despite the fact that the economic fundamentals are now weaker that it was then. Investment opportunities for banks, whose shares play determining role in price upheaval, have remained as squeezed as then. The import and export have also dwindled.
As the growth is not supported by corporate or economic fundamentals, the market may face meltdown anytime, analysts said.
An insider, who preferred not to be quoted, said some are manipulating prices.
“The supply of shares of any good listed company in the market is very low. The shares are already held by few big houses. Close on the heels of low availability of shares, people are easily able to manipulate prices,” he said.
Posted on: 2007-07-03 19:42:10 (Server Time)
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