The bad policy of the Central Bank and the silence of the Ministry of Finance will cause the stock market to collapse

Kathmandu :  Fluctuations in the stock market is still the same. Lately, the stock market has not been able to take the rhythm. The stock market, which has been volatile for the past few days, showed improvement on Wednesday, 16th of Falgun, 2080 B.S as the turnover reached 2 billion Rupees.

Investors were hoping for some policy through the review of the Central Bank. Some recent expressions of Governor Mahaprasad Adhikari were also indicating the same. However, in the end, the Central Bank disappointed all the investors. Neither the Government could do anything, nor the Central Bank could bring reform on policies.

Regulatory Body responsible for market decline:

Lately, the bank’s money has been piling up. The National Bank is taking the bank’s money. However, interest on savings is being reduced, interest on lending has not been reduced. What can be understood from this is that the bank has 180 billion Rupees (drawn by the Central Bank and provided to the other banks). Investors question, ‘If 180 billion rupees do not come into the economy, are the banks and the National Bank trying to destroy the economy? Why to deposit it in the bank and keep it unproductive?’ And, they say, ‘if the money that came into the economy was known to be invested in the productive sector, the capital market would be functioning.’

Now many investors’ money has been dumped. About 150-160 billion Rupees have been lost from the stock market. If the stock market was stable, the investors’ trapped billions of rupees would be returned. Investors are not the only ones who have lost billions. Those who invest in industry, traders and infrastructure have been trapped since the time of Corona. Bank’s NPL has also increased due to the same reason. Investors are of the opinion that it will be difficult to improve the stock market until appropriate policies are introduced.

Investors were only shown hope :

As soon as there was a policy to increase the interest rate of the bank, the market would rise as soon as the policy was cancelled. However, banks and Rashtra Bank together are eating more interest. Even the responsible person of the bank has been talking in the market. Some banks have announced in advance that they will not be able to pay dividends even next year. When the responsible people speak unbridled like this, the market is having a negative impact.

Investors’ morale was increasing when it reached 2200 from 1800 points a few weeks ago. The business was also doing more than 5 billion every day. At that time, investors expected something to come through the monetary policy review. Investors were hoping that the hurdule on share loans, which is a drag on the stock market, will be removed, some policies will be introduced to reduce interest rates, and other policy reforms will be made. However, that could not happen.

On the other hand, it is taking months to elect the Chairman of the Securities Board. The file is stuck on the board. Even the Ministry of Finance did not do what it was supposed to do. If some simple changes were made in the tax, the revenue would also increase and the capital market would also be stable.

Even when investors put their demands in the Ministry of Finance from time to time, they are never heard. Looking at all this, it seems that the willpower is low. If the National Bank chooses, it can make the stock market active immediately. As the Central Bank has not brought any policy, the market is shrinking. At one point, the market rose and the revenue was paid by the investors up to 1.2 billion Rupees. Now, the state is constantly losing revenue from the capital market. The investor’s brain has been disturbed now. There is a silence of depression all around. Investors are empty handed. Regulators are becoming mute. Even if the National Bank and the Ministry of Finance did their work, everything would be fine.

There should be 30-40 billion loan flow in the capital market :

It would be good if positive things came from the regulator for the market to grow. In a small country like Bhutan, it has just increased by 56 percent, the market in India and Pakistan is also in a positive state. We are constantly losing.

In order to strengthen the capital market, lowering the interest rate, improving the limits of the market, and reducing the broker’s commission will make the capital market stable. As the market increases, the investors pay the money that has to be paid gradually.

When the market reached 3200, there were total loans of 125 billion rupees in the stock market. Loans decreased by 65 billion rupees due to the speedy policy of the regulator. Now there is debt in the market up to 85 billion rupees so that the market will improve. There has never been more debt in the stock market. Wrong publicity about the stock market is also affecting.

In our opinion, 30-40 billion Rupees loans should go to the share market. For this to happen, the interest rate should be low. The stock market crashed due to the wrong policy of the Central Bank and the silence of the Ministry of Finance. As long as money is not withdrawn from the capital market, there is no possibility of the economy going forward.

(Based on a conversation with the Former Chairman of Investors Forum Nepal, Chotelal Rauniyar)