A surge in NEPSE with the formation of a new alliance

Therefore, the main reason for the high rise in the stock market seems to be the collapse of old alliances and formation of new ones. For this reason, NEPSE, which was at 1,960.30 in the previous four trading days, went down by about 160 points and rose to 2,799 on Monday. The NEPSE rose by so many points in a single day, the highest since December 25. Previously, on December 25, NEPSE increased by 111 points.

Every political change affects the stock market. Some changes have a positive effect on the stock market and some have a negative effect. This year, there was a positive effect on the stock market. Currently, there is enough liquidity in the financial system, interest rates are continuously falling, banks are looking for customers. Due to the lack of expected improvement in other sectors of the economy including real estate, industry, investors have not got many investment opportunities. Experts argue that the stock market should rise at this time. But in the last few days the market is continuously falling. Citizens did not have the impression that the state is working to improve the economy, and their confidence did not increase, and this had a negative impact on the stock market. In this situation, the former president of the Stock Brokers Association, Narendraraj Sijapati, said that because the old alliance suddenly collapsed and new investors got hope, the market increased.

"Monday's market is a result of investors who are always seeing only disappointment, whether it will be better if the new government is formed," Sijapati said, "Therefore, this is a pure political effect." There is no basis that this growth will be sustainable. He said that the economic indicators should be strong for the sustainable growth of the market and that is not the case now.

In the stock market, investors were able to trade shares for only four minutes on Monday. During that period, NEPSE, the measure of stock turnover, increased by 117.70 points. This is an increase of 6 percent compared to the previous day. The market opened at 11 am on that day and was completely closed at 12:4 pm. The period between market opening and closing is only 64 minutes. During the same period, through 'circuit breaker', trading of shares was stopped for 60 minutes i.e. one hour. In this way, NEPSE increased by 117 points in four minutes.

fell by about 12 points and on Sunday, Nepse closed at 1,960. Rumors of a change in the power coalition were rife since Sunday evening. Due to its effect, the NEPSE increased by 16 points before the market opened on Monday (pre-opening). According to this, when the market opened on Monday, NEPSE had reached 1,976 points. There is a legal provision to increase the price by a maximum of 2 percent compared to the previous day's

price. It is called 'pre-opening price'.

A former executive officer of the Nepal Stock Exchange says that after the market growth on Monday, there was only a flurry. Share prices of 230 companies have increased due to buying and selling of shares worth 37.5 million rupees in four minutes. Most of the companies whose prices have increased seem to have increased by Rs 10 to Rs 15 only," said the official, adding that the main reason for Monday's market increase is manipulation. After the power coalition changes, some investors have deliberately manipulated the market. This will be proven after looking at the situation of the stock market in the next 2/4 days.'

As there is no particular reason behind the market rising at a high rate, investors should be very sensitive in such a situation, says Neeraj Giri, the former executive director of the Nepal Securities Board. Even though the power coalition has changed, the ministers have not yet been decided. Therefore, there is no reason why the market should increase by so many points," he said, "At this time, investors should be very careful, they should not make decisions based on rumours.

The market was closed for the third time on Monday after the NEPSE rose by 6 percent. On this day, the market rose by 4 percent after opening and trading stopped for 20 minutes after the first circuit breaker tripped. After the opening of the first circuit breaker, the market rose by 5 percent, and the trading was stopped for 40 minutes through the second circuit breaker. After that, the open market was closed for the day after the third circuit break occurred at 12:04 PM.

According to the current arrangement, trading is closed for 20 minutes if the market rises or falls by 4 percent in the first hour of trading. If the market rises or falls by 5 percent within two hours of the start of trading, for 40 minutes, and at any time thereafter, if the market rises or falls by 6 percent for the same day, the trading shall be closed.

Another old investor also says that Monday's market does not indicate a sustainable improvement in NEPSE. In my opinion, such an increase is not good for the market. Neither the policy has changed in such a way that there should be a boom in the market, nor has the government been fully trusted. The incoming minister will not be new to the market. But investors seemed very excited. Which is not right," he said, "now there is no money anywhere in other areas, those areas are sick. For the sustainable improvement of the market, money should come from all sides. He suggested that even though now is the time to increase investment as the market has fallen a lot, we should take a wait and see policy for a few more days. Previously, on August 2, 2018, the NEPSE index was at its highest point (3 thousand 199). Since then the declining market has fallen below 2000 several times.