Capital Max Securities Chairman and technical analyst Atitlal Shrestha highlights the foundation for a potential stock market rally due to government policy reforms and declining interest rates.
Atitlal Shrestha, who leads Capital Max Securities as executive chairman, suggests that the Nepali share market is getting ready for a positive rally in the coming days. He believes that recent government initiatives, lower interest rates, expanded margin lending, and regulatory improvements are creating the base for new demand. Since the market has been moving sideways for a long time, he advises investors not to reach conclusions about long-term trends by just looking at short-term ups and downs.
The impact of the 21-point action plan
After the Ministry of Finance released its 21-point plan, Shrestha shared his view on social media about a soaring bull market. He clarifies that his observation was not based on emotions. The government showed more commitment to facility and reform than investors expected. Specifically, the reduction of capital gains tax is a major step. Shrestha believes that Nepal is moving toward lower tax rates compared to many other countries, which can help boost investor morale. However, he warns that policy changes do not show instant results in the market.
Looking beyond monthly performance
Shrestha notes that Nepse dropped from around 2,580 to 2,560 points after the plan was announced. He says we should not assume the market reacted poorly. Instead, it might be preparing for the next phase of growth. We also have to consider the seasonal impact during Ashoj and Kartik. Because investors focus on the Dashain festival, demand might not be huge right now. But he expects interest rates and investment opportunities to have a positive effect once investors return after the holidays.
Role of margin lending
Shrestha views the recent expansion of margin lending as a vital preparation for the market. It allows investors to take on more exposure without using all their cash upfront. For example, an investor wanting to put 1 crore in the market can keep a specific margin and use the rest as a loan. Interest is only paid on the amount used. This helps in managing liquidity and increasing purchasing power. Beyond demand, it also helps in risk management. Informal credit creates big risk for brokers, but a formal margin lending system puts both parties in a secure structure. For brokers, the risk is often larger than their income, so they should prioritize safety.
Confusion over 1 percent share sale rule
The current talk about the rule for selling more than 1 percent of shares is causing confusion. Shrestha thinks this rule should focus on founders who sell large amounts of shares, so they can give prior notice to the market. But the term basic shareholder is confusing and might affect regular retail traders. It is also hard to track how much one person holds if they buy shares from many different brokers. This uncertainty can affect how people decide to buy or sell. He believes promoters should disclose big sales, but retail investors shouldn’t be bound by the same rules. He feels the Securities Board of Nepal is being active and hopes they will find a practical solution after talking to stakeholders.
Advice for investors
Shrestha feels positive about the market because of the policy direction and current environment. He mentions that even getting a 10 to 12 percent return yearly is a good achievement and investors should not expect the market to climb fast every day. Finally, he asks investors to stay away from the mentality of becoming rich overnight. He suggests taking only as much risk as one can afford. Do not enter the market with loans that will make you unable to sleep at night. He reminds everyone that the responsibility of a decision is on the investor themselves. If you earn, it is yours; if you lose, it is also yours. You must manage your own risk and take informed decisions.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
