Tuesday, July 3, 2007

Waiting for that Magical 1000!!!!!!!!!!!





Nearing 1000


Are we witnessing something exceptional? Is this a temporary development? Are we all set for a Paradigm Shift? ………………………………………………

I am bullish. I think we will be witnessing one of the historical moments in the face of Nepal. I am eagerly waiting and praying for that figure to hit 1000. I am not dreaming. I am optimistic। But it is difficult to convince the Bears. Time will only tell. And I am bullish about the Nepalese economy in overall.

Skeptics say that our stock market is all set for a CRASH. What does CRASH mean? I don’t think our stock market is going to crash this early. Not until 2010 atleast. We all brag about the NEPSE being supported and strengthened by Commercial Banks and other financial institutions. So in this pretext is it possible for our stock market to crash? My answer would be as it is: NO NO NO.

Fig: NEPSE hitting the 1000 mark

Here is a simple reason to that। For our stock market to collapse, the companies that are leading the NEPSE should perform very badly। And I don’t think these companies, meaning the Financial Institutions, are going to perform that badly because of the following reasons.

a. According to WTO, starting from 2010 any foreign companies can start a business without equity participation with domestic companies. That means our economy is all set for the Greenfield Investments.

b. Taking this prospect into consideration, Nepal Rastra Bank, has made it mandatory for these FIs to increase their Paid up Capital. Hence, these institutions will be floating some more shares in the market to increase their Paid up capital. And as you all know, Nepalese investors are hungry for FI’s shares. Hence, with positive speculation of the investors, the share prices will go further up taking the NEPSE index along with it.

So in my view, NOW is the right time to start investing in Nepal (if you haven’t started as yet). There is one golden rule in Investment for me: “Enter the market when others are leaving” or “Enter the market when everyone else is bearish about it”. That’s what Warren Buffett says. And that is my rule as well.

If you notice the development of NEPSE in the past year, you will see a steady but slow increment in the value of index. As of today, the NEPSE is waiting patiently to hit the 600 mark. The skeptics about the Nepalese stock market said in 2006 itself that our stock market was going to crash. Did the market crash? Instead the market appreciated and developed. One reason why such so called Bearish Expert failed to predict is this: those experts never looked from the perspective of a Buyer or an Investor. Investors, no matter what happened, in Nepal are bullish than those who suggest them. This is the main reason behind NEPSE’s uphill journey. And I am very much BULLISH that this rally (average) will not stop for another two years or so. What I am waiting now is for that magical figure of 1000. 1k should be the driving force for the NEPSE now. 1k should be the aim of the investors. 1k should be the name of the game NOW.

I am prophesying these lines considering the current status of Nepalese Stock Market. That is with knowledge about Market Hypothesis, security board’s policy, macro and micro -economic situation and the nature of Nepalese Stock Market.

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