Tuesday, August 26, 2014

About Big players in Nepali capital market

Rajesh Sharma
There are questions raised in many forums about BIG players. Some have simply blamed them; some are questioning their existence. Hence, I thought to share my perspective, which is based on my perception/experiential learning.
There are 3 types of Big players here.
1. Cartel of NRB - finance ministry officials. They play with policies. In the recent NRB directives or at least in its ambiguous formulation, these officials played badly. They double as employees and investors.
2. Cartel of a few Big brokers - All brokers do not do share business. A few among them double as investors/traders individually or collectively together with 4-5 brokers. They play with information and procedures. Misinterpretation of policies/procedures/information is what they do to play in the market.
3. Cartel of Big investors/traders - These people help to formulated policies or procedures or even sponsor buying/selling by payment. They have money and they play with that money. There are familiar names in these groups. The informal "New Investor Group" is one among them.
I agree with the comments of many friends that market prices are determined by market forces - demand and supply. But, that happens in free market economy and free market atmosphere. In country like ours, where bottled water and surface transports are run by cartels and government officials patronize them and the leaders have pets in the form of dons; the market forces have limitations in their freedom to function. Hence, while looking at things, we have to differentiate between normal atmosphere and the polluted one and interpret accordingly. Therefore, sometimes here market forces work fairly free and in some other times market forces are just to free in an environment made ready by the clandestine cartels.
P. S.: The above text is my perception based on my experience of past several years. Hence, please take it in that light and not, in any way, as the conclusion of any empirical/quantitative/qualitative research.

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