January 1 , 2019 | Investopaper
Nepse History: Past year 2018
The year 2018 was a time of loss of wealth,patience, and self control for the investors of Nepal. The Nepse index declined by more than 200 points, a loss of almost 15% in a year. Nepse started the year above 1400 and closed the year at 1187.27. This year online trading came into operation with little interest from the investors. The investors participation has been minimal. Investors protested against several authorities to uplift the continuously declining market and protect their wealth and interest in the market. Nepse index reached the lowest in 30 months at level 1118.
Nepse: From Highest to current
In July 27,2016 market reached the peak of 1881 which is all time high of Nepse. After that, the market has been continuously on a bearish trend with some occasional short span bull period. Market has almost declined by 35% from all time peak. Investors lost one third of their wealth during this period. Several reasons have been attributed for the decline. Oversupply of shares due to capital increment by companies,unjustified prices of shares at market peak, communist leadership of the country, repeated credit crisis in the economy, rising interest rate, delay in online trading system etc. are the causes often given the blame for decline.
Nepse History: A journey of Nepse bull and bear cycle of 7 years
After previous peak of 1175, Nepse declined continuously until it reached the bottom of 292 on March 29,2013. This was the major market crash of almost 75%. Investors lost 3/4th of their money during this crash. But the market recovered with time. The bull market continued for more than 4 years and Nepse index reached the all time high of 1881. Nepse index increased by almost 5 fold i.e.550%. Investors made huge amount of profit during this period.
After the peak of 1881, market is constantly on a downward trend with already accumulated loss of more than 35%.
Hope for the market in 2019
Due to the market crash of more than 35%, investors remain highly dissatisfied with the market. Many have left the investment field and have poured their remaining wealth in other sectors. Most of the old investors who have experienced the previous bulls and bears of the market are waiting for the next bull. Several tips and rumours are passed in the investment community about the future direction of the market. Many expect further decline while there are those who expect that market is set to rebound.
The fundamentals of the companies remain strong. The government is stable and powerful. The market has undergone several reforms from demat to meroshare to online trading. The regulating authorities are positive towards the market improvement. The shares of the companies are at bargain prices. Several institutional investors have entered the market.Considering these factors, we expect the market to see major positive jump in 2019.
However, it is necessary to solve some of the current economic problems. Economy is going through recurring credit crisis. Interest rates are at a high level. Economic growth rate is minimal. The gap between imports and exports is ever-widening. If government can carry out definite action plan to keep the economy moving in forward direction, we can expect the market to rebound.