FinMin blames virus outbreak for share market turbulence
Kathmandu, March 12
Finance Minister Yubaraj Khatiwada has said the global outbreak of coronavirus is the root cause of the recent volatility at the Nepal Stock Exchange (Nepse) — the country’s sole secondary market.
Responding to the lawmakers’ concerns during a discussion on the bill to amend the Securities Act, 2007, in the meeting of House of Representatives today, Khatiwada claimed that the recent market fluctuation is a short-term phenomenon.
“We should refrain from coming up with illogical conclusions based on these short-term trends.”
During the discussion, some of the lawmakers alleged that the unexpected recent market movement in the stock market was caused by Minister Khatiwada’s ‘unpopular’ image in the market.
Dismissing the accusation, Khatiwada said, “The share value of the listed companies in the share market is governed by their financial health and government’s policies. A single person cannot affect the share market.”
According to Khatiwada, the share market is a good platform for the general public to grow their investment rather than for the ultra rich.
“The share market provides an opportunity for those with limited and insufficient capital to set up an enterprise to expand their investment,” he explained, adding that however, share investors should be mindful of the market trend and make prudent investment decisions.
During the meeting today, Minister Khatiwada informed that the amendment bill aims to make the securities market more competitive and transparent. “We have brought this bill so that even the ordinary people can participate in the share market. It includes a provision that allows investors to seek margin loans from microfinance companies as well,” he said.
He said the government will better regulate the share market in the coming days by strengthening the role of the regulatory body and making the securities market more competitive and transparent.
After making a strong recovery from Tuesday’s over six per cent plunge on Wednesday, the benchmark index tumbled again by 3.23 per cent or 45.91 points to 1,377.18 points today. While sensitive index slumped by 3.02 per cent or 9.19 points to 295.50 points, float index was down 3.28 per cent or 3.32 points to 97.78 points.
All the subgroups landed in the red today, with the hotels and non-life insurance recording losses of over five per cent.
Altogether 5.69 million shares of 182 companies were traded through 23,205 transactions that amounted to Rs 2.21 billion today. For comparison, 5.63 million shares of 180 firms had changed hands through 23,237 transactions yesterday that totalled Rs 2.22 billion.