Kathmandu, March 13:

The Nepal Stock Exchange (Nepse) index has witnessed a roller coaster movement over the last four weeks.

After witnessing an increment of more than seven points every week during the last two weeks of February, the growth rate dropped significantly and went into the negative territory in the second week of March.

Experts term the fluctuation of two to three points in a week as normal. They are also of the opinion that investment made on stocks without doing fundamental research has attributed to the growth earlier in the month. Our stock market runs according to international norms and is primarily governed by demand and supply, said Mukunda Dhungel, general manager at Nepal Stock Exchange. Although stock market is always turbulent, increments at the range

of seven points a week can not however be overlooked, said Dhungel.

“Commercial banks have the largest chunk of shares in our stock market and the Nepal Rastra Bank (NRB) has stated that commercial banks’ paid up capital should be at least one billion rupees by 2066. This might be one reason that is triggering the rise in the index,” said Dhungel. There is always a stock market boom in about five years and the recent performance of Nepse could be a hint to it, Dhungel added.

“Today stocks are routinely considered as investment vehicles even by conservative investors. The circle is widening, giving place to investors to amass capital for future. However, our stock market is very young and investors sometime tend to jump the gun without considering its prospects, causing the index to rise high,” said Dhungel.

“Since only about 30 per cent shares are floated in the stock market, share transaction remains limited. Although we can not say that the fluctuation in the share market would have a drastic impact on the economy of the country, it can not be denied altogether,” said Deepak Kafle, chairman at Securities Board Nepal.

“Our stock market is not big and we are at a developing stage. So fluctuations like this can be termed normal,” he added. Commenting on the extraordinary performance of Siddhartha Bank on the first week of its transaction, Kafle said that depending on how the newly-listed companies settle down, share transaction can reach a pinnacle or its nadir.