Rajesh Sharma
Could the market sustain the increase?
The market has been highly unstable for a long time. However, it was continuously going down for a few months with some exception of increase for a day or two. This phenomenon is the result of immaturity on the part of investors and domination of traders. We behave in a very emotional manner and lack ability to rationalize new developments. Gut feelings, believing in luck and making decisions influenced by rumors are a few characteristics of us.
However, this depressed phase of a longer time period has, perhaps, compelled to leave the market for quite a good number of small investors and also it downsized the influence of some BIG names. The downward journey of the market has inflicted injuries to many. Now, who are still surviving, they have plenty of experiences. We have seen ups a few months ago and downs recently and most importantly, we survived to see happenings of today. In this time of "survival of fittest", we must have some strong qualities and are buying and selling now.
The external factors including macro-economic fundamentals and company performances are not bad. Even, they are far better than previous years. The political drama alone may play negative or positive as the parties and leaders are unprofessional, unpredictable and self-serving. Anyway, now, they are also pressurized from all corners and they have no escape route. In Magh 8 or after some months, they must complete the constitution writing task. Now, the Indian line is clear - you got already what you wanted in this fluid situation, institutionalize the gains by getting further endorsement from a more stronger authority in Nepal. Hence, the constitution and a national unity government afterward sound logical now.
Therefore, I believe that the increase that we have seen is not only sustainable, it will move up much higher. May be, tomorrow or day after, we can not say; but on week to week basis. it may go up and up. However, the gradual and slower pace of increase is much better and sustainable.
In this phase of upward movement too, we should not be color blind. We have to select the companies to trade on or to invest carefully.
Sunday, December 14, 2014
Thursday, December 11, 2014
Overcome Fear!
Rajesh Sharma
Political uncertainty and perception of gloomy future have been considered the main reasons behind free fall in NEPSE index. Where the fall started, it created a strange phenomenon of fear among investors. Is the political situation so worse? Is the perception of gloomy future right?
1. The talk of new constitution has been irritating. Talks after talks, meeting after meetings and sitting after sitting have gone astray. Hence, this is frustrating. But, this failure of political leadership has limitations. Is it that sky will fall down if no constitution will be there in January or even July next year? No.
2. The politics of subjugation has many demerits. Bending body in front of a foreign leader is too bad. Renting conscience to occupy positions of power is too shameful. But, strange results have been seen in Nepal due to this factor. Decade long civil conflict has ended due to 12 point agreement as India wished so. In the same fashion, one fine morning if India wishes to end petty bickering in Nepal, there could be 'consensus' within hours. The decisions would be delivered from Delhi in fast food boxes, and the leaders of different names and faces would assemble the food items in packets and sell to us as their very own creation. Hence, being serious about differences among parties and leaders is too unrealistic.
3. There is no system break down; there is no anarchy at grassroots level where people live and work and maintain peace and harmony; and the financial institutions are functioning normally though a few cases of fraud and embezzlement are there.
4. Hence, the higher wattage given by media, experts and investors to political uncertainty particularly the holy cow called constitution is artificial. In reality, we do not have instability, yes there is some uncertainty and that is not that bad as it is perceived. And, the perception of gloomy future if constitution promulgation is delayed is nothing other than an imagery created by the investors themselves. This is not a realistic conclusion that we will be in dark days without a new constitution.
5. Finally, I believe, we have to come out of the cocoon made by self inflicting BIG players in the beginning and nurtured by ourselves thereafter. The market gets affected by government policies, its nature and image; however, focusing on a single factor for everything is the result of a tunnel vision. When, a good number of we investors will understand this reality, the market would start behaving normally. And, I think, the days are nearer, when many among us will understand this. Now, BT pressure has been over; CDS implementation sounds sure, banks have been providing loans at attractive interest rates and relative political stability is still there; only the major hurdle is mass psychology of fear among investors. This is time, we have to take moderate risk and use the opportunity provided by the lower market index.
Posted on
Political uncertainty and perception of gloomy future have been considered the main reasons behind free fall in NEPSE index. Where the fall started, it created a strange phenomenon of fear among investors. Is the political situation so worse? Is the perception of gloomy future right?
1. The talk of new constitution has been irritating. Talks after talks, meeting after meetings and sitting after sitting have gone astray. Hence, this is frustrating. But, this failure of political leadership has limitations. Is it that sky will fall down if no constitution will be there in January or even July next year? No.
2. The politics of subjugation has many demerits. Bending body in front of a foreign leader is too bad. Renting conscience to occupy positions of power is too shameful. But, strange results have been seen in Nepal due to this factor. Decade long civil conflict has ended due to 12 point agreement as India wished so. In the same fashion, one fine morning if India wishes to end petty bickering in Nepal, there could be 'consensus' within hours. The decisions would be delivered from Delhi in fast food boxes, and the leaders of different names and faces would assemble the food items in packets and sell to us as their very own creation. Hence, being serious about differences among parties and leaders is too unrealistic.
3. There is no system break down; there is no anarchy at grassroots level where people live and work and maintain peace and harmony; and the financial institutions are functioning normally though a few cases of fraud and embezzlement are there.
4. Hence, the higher wattage given by media, experts and investors to political uncertainty particularly the holy cow called constitution is artificial. In reality, we do not have instability, yes there is some uncertainty and that is not that bad as it is perceived. And, the perception of gloomy future if constitution promulgation is delayed is nothing other than an imagery created by the investors themselves. This is not a realistic conclusion that we will be in dark days without a new constitution.
5. Finally, I believe, we have to come out of the cocoon made by self inflicting BIG players in the beginning and nurtured by ourselves thereafter. The market gets affected by government policies, its nature and image; however, focusing on a single factor for everything is the result of a tunnel vision. When, a good number of we investors will understand this reality, the market would start behaving normally. And, I think, the days are nearer, when many among us will understand this. Now, BT pressure has been over; CDS implementation sounds sure, banks have been providing loans at attractive interest rates and relative political stability is still there; only the major hurdle is mass psychology of fear among investors. This is time, we have to take moderate risk and use the opportunity provided by the lower market index.
Posted on
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