Not ‘Dashain’, but ‘Central Bank’ is the Reason to Crash the Stock Market

Kathmandu : The double-digit decline in the stock market continues. But what is the reason for the continuous decline in the market? Rather, the answer is flat, “Bad policy of Central Bank.” The Rs.18 trillion of loss faced by investors has been disappeared, nobody knows where the loss amount has gone. Among that money, it is said that 6 trillion rupees  is in the bank itself.

But banks says that they are unable to provide loan to the needy ones.Central Bank, which has disrupted the investment environment for a long time by imposing a cap of 120 million on the limit of share mortgage loans. It could not achieve anything other than shifting the cap limit to 150 million for personal and 120 million for institutional.

The interest rate had to be reduced but it didn’t happen. Due to the irresponsible action (imposing of high interest rate in loans) of the Central Bank, people do not have Dashain expenses. There is no amount to pay interest. Due to the fact that their pockets are empty, the common people do not dare to buy anything other than essential goods. Therefore, there is not much activity in the market even on the eve of Great Festival (biggest festival of all Nepalese).What is the reason for the continuous decline in the stock market?

Those who have political leanings and enjoy the praise of the Central Bank Governor are arguing that the stock market will always be relaxed during Dashain and Tihar. However, real investors do not agree with the argument that the stock market will fall due to Dashain. They say that there is no reason why the stock market should fall due to the festival.The former president of Nepal Investors Forum, Chhote lal Rauniar says, ‘It cannot be said that the stock market was affected because of Dashain.

If so, it means that the cash that should have come to the share market went to shopping. However, people do not have money for shopping. There is little movement in the market. And, can it be said that the capital market was affected by the festival? Shouldn’t it be seen that the money is going somewhere?’In addition, Rauniar says that the main culprit is the Central Bank.

Stating that the practice of misinterpreting the capital market is increasing, Rauniyar said that the capital market has become unhealthy due to increased political interference. Even the promoter shares after completing 20-22 years are now available for Rs.100, he further says, ‘The investment situation is like this. What is worse than this?’

He says that the capital market has been affected because various companies have issued IPOs and FPOs recently. Rauniyar said that after meeting the Chairman of the Securities Board, they asked companies with negative net worth to stop issuing IPOs and FPOs.Chandrasing Saud, the former general manager of Nepal Stock Exchange NEPSA, says that the stock market has not strengthened due to the bad policy of Rashtra Bank and the destiny of capital expenditure.

People may not have come to the capital market because it is now time to pay quarterly interest, he said, “We can expect the stock market to tighten after October.” After Dashain Tihar, the government’s capital expenditure will also increase. Other doors will also open.If the loan cap was removed, big investors would have run billions of loans, the capital market would have been active.

Even the biggest investors who have a hold on the capital market have not been able to take loans due to the credit limit. Now, investors are beginning to suspect that Central Bank and other banks are working together to cartel.