Although the listed companies have started to announce dividends for the last FY, investors are panic selling their stocks in panic causing a huge decline in NEPSE index.
Along with the NEPSE index, the transaction amount has also dipped sharply during the last few days. The transaction amount that was Rs 21.31 billion on August 18, has since dropped to Rs 9.5 billion in the last two days.
However, investors are positive about the decreased transaction amount. As per them, decreasing transaction amount indicates recovery of the market. “When the transaction amount declines, it means, investors are reluctant to sell their stocks. It shows that the sellers are not giving into the low price offering to them by the buyers. There were plenty of buyers in the market today, however, they were offering low prices. Thus, the sellers are not selling their stocks which ultimately declined the overall transaction amount. If the transaction amount decreases during the bearish market, it is a good sign. It should be taken as a sign of a recovery market,” said Gauri Shanker Thapa, an investor.
As per him, such a scenario has arrived many times in the domestic stock market. On June 14, the transaction amount reached Rs 19.55 billion which declined to Rs 4 billion on July 6 within 16 trading days. The NEPSE index also fell by 173 points to 2818.10 points during those days. The market then bounce back and broke an earlier record of Rs 19 billion. Thus, the transaction amount should decline with the index. It strengthens the market, added Thapa.
As per the investors, the market has fallen under the shadow of the NRB directive on margin lending. Nayan Bastola, another investor said that the few investors are using the directive as a weapon to bring down the market during dividend season. The directive has paved the way of margin lending to many small investors. It will benefit the investors in the long term. Thus, no investors should fall into the trap of the big fish. Falling into the trap means they will lose both the value and dividend,” added Bastola.
