No Trading at NEPSE due to general strike

It can only happen in Nepal.
Twice — in two months time period from February 21 to May 1 — the stock market closed and the government and Security Board of Nepal (Sebon) were least bothered.

The secondary market — that operated even during the 19-day Jana Andolan II in 2006 — closed for the whole week and the government, stock exchange and regulatory authority became mere spectators. They did nothing to boost the confidence of the 1.5 million investors.

“The government is more revenue-centric,” said Mahesh Pandit, an investor, who wanted to sell his shares to send his son for further study but could not due to closure of the Nepse.

“It is quite rare in the world that the stock market is closed,” he said adding that the government and Finance Ministry has no interest in capital market development and investors protection. “I also doubt the Finance Minister’s ability of understanding of stock market and its value in the economy,” he added.

Earlier, investors closed the Nepse for a week — from February 21 to 26 — demanding the central bank’s regulation be changed as, according to them, it was not favourable to them.

Last fiscal year, Nepse had contributed around Rs 930

million to the government coffer but this year, it would plunge three times lower due to poor performance and repeated closure.
Like government, some investors have also taken the closure of Nepse lightly. “The Nepse has been performing poorly due to low confidence,” said an investor without wanting to be quoted. “On one hand, the closure has stopped the free fall of Nepse and on the other, after the closure, there is a chance of Nepse looking up,” he added.

After a week-long closure of Nepse — due to investors’ strike — in the last week of February, the Nepse started looking up. “But the trend could not continue,” he said.

The market had closed at 485.14 points on February 18. After a week-long strike,when the market opened on March 1, the Nepse gained 12.72 points to 497.86 points. But the growth could not continue and after two weeks it came down to as low as 481.19 points.

The new investors might loose confidence in the market, if the market repeatedly closes. At a time when the capital market is bearish due to low investors’ confidence, its going to have negative impact on the investors’ psychology and the chances of panic selling might bring the Nepse down.

The market has closed at 419.28 points a week ago.