COVID encourages investment in share market


As the COVID-19 pandemic has hit the global economy and businesses have taken a downturn, the domestic share market seems to be taking advantage of the current situation.

Since many industries have shut shop, halted operations or are being partially operated, investors have turned towards the stock market. As a result, the secondary market, which is setting new records on a daily basis, also crossed the 2,300-point mark today.

The Nepal Stock Exchange (Nepse) index increased by 28.46 points to rest at 2,315 points today. A total of 15.35 million unit shares of 208 companies worth Rs 6.37 billion were traded today.

The sensitive index too rose by 8.17 points to close at 443.42 points.

Meanwhile, among the subgroups at Nepse, banking increased by only 1.01 points.

Similarly, trading went up by 232.97 points, hotels by 16.87 points, development banks by 110.01 points, non-life insurance by 78.05 points, manufacturing and processing by 49.82 points, microfinance by 115.55 points, life insurance by 221.01 points and hydropower sub-index by 7.2 points.

Nepal Telecom was at the forefront in terms of transaction amount with shares worth Rs 581.01 million exchanging hands today. NIC Asia Bank and Civil Bank were at the second and third positions, respectively in this category.

Along with the increasing trading activities in the capital market, the number of Nepalis entering the share market has also increased significantly.

Although the number of people trading in the secondary market has not gone up much, the number of people opening demat accounts to file applications for IPOs is rising by the day.

According to CDS and Clearing Ltd, 72,011 people have opened demat accounts in the last one week. Till last year, around 2.4 million people had opened demat accounts while the number of people opening demat accounts has risen to 2.5 million till date. As per CDSC, over 10,000 people are opening demat accounts on a daily basis at the moment.

Analysts say that the number of people opening demat accounts has also increased due to the IPO issued by Nepal Infrastructure Bank Ltd.

Besides, stakeholders say that the share market is witnessing growth due to the COVID-19 pandemic. “Due to the pandemic, investors do not have other areas to invest in.

Thus, they are turning towards the secondary market,” mentioned Chhotelal Rauniyar, chairperson of Nepal Investors Forum.

Moreover, introduction of the online platform at the share market and increasing awareness among the public have also started attracting more people towards the share market, he said.

“Online platforms have made it easier for people to conduct share transactions.

Hence, many youths and even housewives are opening demat accounts these days,” Rauniyar shared. “Moreover, the largest IPO ever issued by Nepal Infrastructure Bank Ltd has attracted a large number of people towards the market and number of demat account holders is increasing.”

Moreover, people are also being attracted towards the stock market because of the low interest rates on bank loans and the flexible policies being brought by the government body as well as the regulatory body, Rauniyar added.