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Century Commercial Bank Ltd (CCBL) has this week signed an agreement with Sanima Life Insurance (SLI) for ‘Bancassurance’ services.Jeevan Bhattarai, acting chief executive officer of CCBL, and Keshav Raj KC, deputy managing director of SLI, signed the pact.The agreement enables CCBL to sell life insurance policies to its customer from its branches across the country under the arrangement with SLI, according to a press release.  

Samsung Electronics has introduced a new bun­dling offer for its Samsung Galaxy Note 8 smartphone.Customers purchasing the smartphone will now get a Samsung Bottle Speaker, breakage insurance for eight months from Shikhar Insurance and 16GB 4G data, 2GB every month for eight months, from Ncell, in the bundle.Customers also have an option of easy EMI, which is being provided by various partner banks.  

NRB-directed capital increment of the banking and financial sector followed by the insurance board-di­rected one for the life and non-life insurance companies had already created a glut in the secondary mar­ket. Unfortunately, concerned reg­ulatory and policy making bodies were hardly prepared for the glut. When the floodgates opened, the regulatory body simply released a press communiqué asking the inves­tors and traders “not to panic”— something which was too little too late. The call was hardly heard and the index continued moving south.

The promise of three levels of elections, implementation of the new constitution, and hope of new and stable government and socio-economic development kept most investors and traders hope­ful. They were duly rewarded with good bounce-backs at least on three occasions ( July/August 2017 when the index reached 1,675, Septem­ber 2017 when it reached 1,587, and November/December 2017 when it got to 1,556) triggered by “positive” political news. Smart traders were able to accumulate at successive support zones while booking profit whenever the mar­ket became euphoric with “feel-good” political news and events. The euphoria turned into momentary blitz of opportunity.

With each bounce-back, Mr. Mar­ket continued losing its steam and overall index continued to shed more points. Just a few weeks back, when the confirmation of Mr. Oli as prime-minister and promise of stable government hit the market, it galloped by 69 points, giving a second chance to the ones who were either unable to book profit or make a stop loss at previous touching of 1,445-1,450 zone.

Last week the warning bells started ringing louder when one of the commercial banks came up with saving deposit product at 10 percent return. The emergency meeting of the bankers’ association had an agreement to put a ceiling of 11 per­cent on term deposits and 8 percent on saving deposits. But the damage was clearly inflicted on already weak market sentiments. Mr. Market, which had respected 1,380-1,390 support zone on multiple occasions since the beginning of 2018, showed reluctance to show same respect this time. On February 28, the multi-month trendline support at 1,350 also had a breakout with volume and this was the last straw. Wholesale panic selling ensued on the last hour of the day and the bloodbath contin­ued through this week too.

On March 5, another commercial bank came up with a “structured term deposit” product at 9 percent with minimum monthly deposit of Rs 500 and above. This unfortu­nately indicates that the bloody nose of Mr. Bull is going to need more time to heal.

By Manil Shrestha

 “Nepal should focus on attract­ing foreign investment but not in unproductive sectors like real state, stock market and hire purchase,” said the new finance minister Yubaraj Khatiwada soon after assuming office. This caused a stir in the Nepali business commu­nity, especially in the share market. The already shaky share market witnessed further losses following the remark as investors started pan­ic-selling, leading to an alarming drop in the Nepal Stock Exchange (NEPSE) index. Sunday, March 4, the first day of trading after a long weekend, saw a 41.56 point fall in the market, to close at a year low of 1287.74.

Khatiwada’s statement has drawn flak from investors and other stake­holders in the share market with speculators predicting record lows for the NEPSE index. Investors could lose billions of rupees.

Recognized as one of the best economists in the country, Khati­wada holds a Phd degree in Mone­tary Economics from Delhi School of Economics and has previously served two terms as the Vice Chair­man of National Planning Commis­sion. He was also a Governor of Nepal Rastra Bank, the central bank.

During his tenure as Governor, Khatiwada was known for his strict measures against money launder­ing, regulation of bank loans and progressive strategies for the econ­omy. While starting his new stint as finance minister, he has said that “tackling money laundering, com­pleting pending government proj­ects and maintaining a balance in trade between India and China” will be among his to priorities.

But while there are some who blame Khatiwada for the recent bearish trend, Chhote Lal Rauniyar, the vice chairman of Nepal Inves­tors’ Forum, and also a recognized name in the share market, attributes the ‘bloodbath’ in the share market, at least partly, to the failure of the regulatory bodies. The delay in the launch of the fully automated online trading system is causing many pro­spective entrants in the market to refrain from investing now. (The online trading system is expected to be launched by June 2018.)

Also, at present, the share brokers are mostly in Kathmandu, which puts investors from the outskirts at a disadvantage. Since small investors outside Kathmandu cannot easily buy stocks, there is an oversupply of shares in the market.

“The panic is also the result of the weak mentality of investors at the moment,” says Rauniyar. “The state­ment of the finance minister just happened to increase their fears. Some are exaggerating the signifi­cance of his comments and stoking panic for their own benefits.”

The ongoing liquidity crunch and the high interest rates commercial banks are offering on deposits also dissuade investors from holding on to their stocks. Moreover, there is an oversupply of shares as paid up capital of financial institutions has increased, with most of them offering bonuses, right shares, Further Public Offerings and Initial Public Offerings.

“We have high hopes from the KP Oli government as he has always supported the securities market,” Rauniyar says. “Even during the Indian embargo in 2015, when Oli was prime minister, the share market was steady. Even now many hydropower projects are issuing shares to the general public to raise capital, so the share market cannot be considered entirely unproductive.”