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| Market Crash |
The History of stock market is
not long in Nepal. Nepal Stock Exchange (NEPSE) is only one stock exchange in
Nepal opened its trading floor in the beginning of 1994. Within a short period
since its inception, the NEPSE index witnessed significant ups and downs. If we
analyze the NEPSE data that span from August 2000 to July 2014, radical
vicissitudes in stock index is seen. Earlier
on August 31, 2008, the NEPSE index had reached
its all-time high of 1175 points
where as on June 15, 2011, the NEPSE index recorded low of 292 points. On July 14, 2014, the benchmark index reached 1036.10
Table 1: Glimpse of the Nepalese Stock Market
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S.N
|
DATE
|
NEPSE INDEX
|
1
|
2008-08-31
|
1175
|
2
|
2011-06-15
|
292
|
3
|
2014-07-14
|
1036.1
|
Most of the experts suggest that
the faster the stock has climbed, the quicker it will fall. In investing, as in
hare-and-tortoise races, slow and steady gets the price. The easier information
arrives, the less valuable it is. Good investment decisions are hard work,
undertaken and arrived at one at a time.
A Stock market crash has no fixed definition in terms of percentage
loss or duration, which means they can occur in a single day, or over the
course of weeks, months or even years.
If we observed world's greatest market crash history, there were a
number of crashes we found among them Wall
Street Crash of 1929, 1971 Brazillian
markets crash, Souk Al-Manakh Stock market crash 1982 were some examples.
If we analyze the NEPSE data of
the year 2015, we found a significant numbers of ups and downs. In the
beginning of the year i.e January 2015, NEPSE index was at 902 points while market opened. On 20th August, NEPSE
recorded to hit an all-time high of 1221.30
points, closed at 1200.92 on the same day. NEPSE rested at 1151.38 points in 31st December i.e. at the end of the
year.
Table 2: Glimpse of the Nepalese Stock Market
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S.N
|
DATE
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NEPSE INDEX
|
1
|
2015-01-01
|
902
|
2
|
2015-08-20
|
1200.92
|
3
|
2015-12-31
|
1151.38
|
Major highlights of Nepalese Stock Market in the Year 2015:
Nepal Stock
Update observed the major highlights of Nepalese Stock Market in the year
2015. Among them, followings are some major highlights.
- Earth Quake (25th April & May 12) impact: First time in history, NEPSE was closed for continue 28 days. NEPSE dropped by 101 points to rest in 938 points after opening of the market after earthquake.
- Impact of monetary policy: New monetary policy with the directive of compulsory increase of paid up capital, NEPSE index raised radically by some points. This compulsory made regulations increased expectations of investors to get bonus and right shares to meet the deadline which also helped NEPSE index to jump to 1221 points which is highest recorded in the year 2015
- Impact of Rewat Bahadur Karki's appointment in SEBON: NEPSE index raised by some points after his appointment in SEBON expecting to get some well improvement of the capital market. After his appointment, SEBON influenced the market by minimizing expenses to issue IPO, declaration to make citizen fund to institutional investors, management of broker commission, advancement of investment of stock market etc.
- Impact of Madhesh movement and blockade: NEPSE index decreased by some extent due to the impact of Madhesh movement and blockade. Nepalese economy is estimated to lose more than 15 trillion during this period.
- Dematerialization of share: Investors feel more comfortable after dematerialization of share.
- Impact of market depth: Beginning of market depth is hoped to be a milestone for the Nepalese capital market.
- Attraction in Microfinance and Insurance: Majority of the investor directed their investment towards microfinance and insurance at the end of the year.
- Issuance of IPO and FPO: Flow of IPO and FPOs also affected market which is well accepted by the investors.
- Clearance of BT Share: Directive published to clear shares also influences the market.
- Impact of Online and Offline news portal: Different financial newspaper as well as online financial news portal fully covered each and every news regarding share market even a small change in capital market.
NEPSE; Rise & Fall during the year 2016 (Up
to 26th October, 2016)
Panic sell-off pushed NEPSE Index
down by a whopping 88.81 points on Monday, 2016-08-08, which is recorded as the
highest fall in the year 2016. After the benchmark index plunged 5% by midday,
NEPSE triggered circuit breaker, suspending trading for the rest of the day. As
the market plunged, SEBON on Monday was forced to issue two statements. In its
first statement, investors were requested to calm down and not to lose
confidence. SEBON issued second statement in which it stated that the probe
committee has been scrapped. NEPSE jumped 84.51 points on Tuesday, 2016-08-09
(Following day), ending an eight-day losing streak which is recorded as the
highest rise in NEPSE index in the year 2016. Some other NEPSE movements are
listed in the following table.
Table 3; NEPSE Movement- Ups & Downs during the year 2016
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S.N
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DATE
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NEPSE
|
ABSOLUTE CHANGE
|
%
|
1
|
2016-06-05
|
1483.14
|
-34.98
|
-2.30417
|
2
|
2016-06-06
|
1516.8
|
33.66
|
2.26951
|
3
|
2016-06-27
|
1721.77
|
36.6
|
2.17189
|
4
|
2016-07-18
|
1786.57
|
40.83
|
2.33884
|
5
|
2016-07-25
|
1838.49
|
39.66
|
2.20477
|
6
|
2016-08-04
|
1768.6
|
-45.12
|
-2.4877
|
7
|
2016-08-08
|
1675.91
|
-88.81
|
-5.03253
|
8
|
2016-08-09
|
1760.42
|
84.51
|
5.03253
|
9
|
2016-08-14
|
1733.93
|
-40.94
|
-2.30665
|
10
|
2016-08-15
|
1694.81
|
-39.12
|
-2.25615
|
11
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2016-08-22
|
1683.12
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-39.31
|
-2.28224
|
12
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2016-08-24
|
1730.62
|
48.76
|
2.89917
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13
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2016-09-25
|
1730.64
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-36.27
|
-2.05274
|
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