Loans flowing into share securities do not have to be invested only in the capital market, because of this, NEPSE did not increase by a high number when share loans increased.
What you should know
In the last 11 months of the financial year alone, banks and financial institutions have provided an additional 38.57 billion rupees in share loans. Compared to the 11 months of the previous financial year, the share loan disbursed during the same period last year is 42.8 percent more.
In the 11 months of the previous financial year, the growth rate of share loans increased by 14.2 percent. Share loans have been increasing since the beginning of the last financial year. But the share market has not increased in proportion to the share loan.
There is no obligation to invest more money in the stock market than the amount of money that has come in the name of share loan. Therefore, the former chairman of Stock Brokers Association, Dharmaraj Sapkota, said that if the loan flowed into share securities increases, it may not all be invested in the capital market.
"In recent months, share loans seem to have increased, so the demand for shares in the market should increase, but the market does not seem to increase as expected," he said.
According to the instructions of the National Bank, a margin loan is a loan provided by banks and financial institutions by keeping shares as collateral. Sapkota said that since there is no obligation that the loan should be invested only in the stock market, it cannot be questioned why the loan was invested in other sectors. According to Rashtra Bank's data, share loans between 25 to 50 lakh rupees increased by 17 percent and loans below 25 lakh rupees increased by 10.4 percent till last May. In the same period, loans of more than 1 crore rupees increased by 58.1 percent and loans between 5 million to 1 crore rupees increased by 23.1 percent.
By June 2081, loans of less than 2.5 lakhs increased by 3.3 percent, loans between 25 and 50 lakh rupees by 10.6 percent and loans between 50 lakh and 10 million rupees increased by 0.7 percent. Similarly, the data of Rashtra Bank has increased by 20.4 percent in loans above 1 crore in 11 months of the previous financial year. There is more liquidity in the financial system since last financial year. Interest rates are continuously falling while loan demand is very low. That's why now banks are asking share investors to take loans.
Rashtra Bank's data shows that even small investors have taken loans from banks. However, another former chairman of the Stock Brokers Association said that investors are confused as to why the market could not grow. "Right now there is a favorable situation for the stock market from all sides. But the stock market has not risen as expected," said the official, adding that what is needed for the market to grow now is an increase in investor confidence through positive signals (news). Looking at the nature of transactions in the stock market in recent days, it seems that investors have increased their investment.'
In the past, credit flowed in the form of overdrafts also used to come to the Puaji market, but in recent years it has been very less: Dharmaraj Sapkota, former president, Stock Brokers Association
Most of the necessary foundations for the growth of the stock market are ready. Like – liquidity is sufficient, interest rates are falling. Especially after the release of the monetary policy, the NEPSE increased by about 4/500 points to over 3,000. But that growth did not last long and the market began to decline. At the same time, by Wednesday, the NEPSE index has dropped to 2,767 points. However, the investors say that there is no margin call from the bank as there is no big fall in the stock market.
The stock market was being affected by the policy of the state. In recent years, the policy has also been seen as market-friendly. However, due to the lack of confidence in investors, they are not able to invest much.
Since the beginning of the financial year 2081/82, there is sufficient liquidity in banks and financial institutions. This is why banks and financial institutions are bringing various offers on small and large share loans. Some investors are also taking share loans. But experts say that the market has not grown as expected due to the sluggish economy, stock market that has not grown as expected.
The size of the stock market increased by 14 billion despite the decline of NEPSE.
The NEPSE index, which measures stock trading, fell by almost double digits on Wednesday. After decreasing by 8.70 points (0.34 percent) compared to the previous day, the overall NEPSE closed at 2,767.20 points. On this day, the share price of 59 companies increased, 188 companies decreased and 2 remained stable. In this way, the overall NEPSE has decreased by almost double digits as there are more companies that decrease than increase in share price.
On this day, 1 crore 52 lakh 66 thousand 617 shares were bought and sold in 53 thousand 853 transactions. Shares worth 5 billion 20 million rupees have been traded in this purchase. The turnover has decreased compared to the previous day. Shares worth 5 billion 63 crore 65 lakh rupees were traded on Tuesday.
Among the 13 sub-groups traded on this day, the overall NEPSE declined by almost double digits after the index of all except hotel and tourism and collective investment fund decreased. Although NEPSE has decreased, the size of the stock market (total market capitalization) has increased. Out of the
transactions, 59 companies' share prices have increased, while 188 have decreased. But the total market capitalization has increased by about 14 billion. The total market capitalization, which was 46 trillion 37 billion rupees on Tuesday, has remained at 46 trillion 23 billion rupees on Wednesday.
