Pandemic pulls young investors into Nepali share market
As of 13 August 2020, the Nepal Stock Exchange (NEPSE) data showed 278,101 active clients doing business with 59 listed broker companies. The same list on September 30 had 337,360 active clients.
Similarly, as per the Central Depository System and Clearing Ltd (CDSC), Nepal’s sole depository, the number of Demat accounts—the online financial securities accounts—had crossed 1.8 million by August 25, from 1.5 million previous May and 1.2 million in April 2018. These datasets show the number of people engaged in the share market is increasing by the day. The fastest growing investor segment is comprised of those aged 20-30.
Pramod Khanal, an employee with broker Number 40, says that the number of young investors in the share market increased drastically after 2015-16. Before that, the 20-30 age segment comprised only 5-10 percent of all investors. Now the proportion has climbed to 25-30 percent. “Most recently, the covid pandemic has brought countless first-time investors into the Nepali share market.”
Kabita Shah, 24, a student of agriculture in Kathmandu, says she first got involved in the share market indirectly through her relatives’ accounts two years ago. “Once I was at a bank and was absolutely fascinated by a big throng that had descended to the place to invest in an IPO,” she recalls. She then started actively researching markets.
Shah says the share market is the perfect illustration of her life motto: “Work smart, not hard.” As a student, Shah rued having to depend on her parents for every single rupee. “So I thought, why not invest a little of own savings and make some money on my own?”
Santosh Sapkota, 30, from Kavre, says it has been seven years since he took the plunge. For him, it has since been a career-defining move. “This is how I hope to make my living,” he says. Sapkota these days spends most of his time investing, trading, technical analysis, and studying market behavior.
Narayan Aryal, 23, from Palpa, for his part, considered the share market the perfect investment avenue for his middle-income family. When he started trading shares 3-4 years ago, most of his other family members were already in it.
Manju Magar, 27, a secondary school teacher in Kathmandu, joined the frenzy eight months ago following a long research. Magar had heard a lot about the share market from her parents. “I had practically nothing to do during the pandemic-induced lockdown. I decided to join the share market with the belief that I could make some money on the side without having to exert myself too much,” she says.
Similarly, Rubi Suwal, 28, an accountant from Bhaktapur, has been trading shares for five years. He says he was interested when he heard of his friends and relatives buying expensive homes and vehicles with the income from the share market.
Junu Karki, 26, recently started investing in the share market as well, even though she is not very active. She says it was her husband, an active investor, who got her interested.
For Laxmi Bahadur Pachhai, 25, from Jumla, who is himself a student of finance, the inspiration was his college seniors who just could not stop talking about the market. He also thinks it’s a good way to make money.
Laxmi Bahadur Pachhai
Most responders APEX talked to said that though they were in it largely to make money, they were also enjoying the learning process.
Manju Magar says that investing is also an art, and that without patience and risk tolerance, you could soon lose all your money. “People lose money in the market owing to both greed and fear,” she asserts.
Kabita Shah attributes her investment success to her rigorous research and financial analysis.
Santosh Sapkota lost a lot at the start. He then started reading financial books and online articles on wise investing. “People think it’s easy. Actually there is a lot more to investing than choosing a company at random and putting your money into it. I learned that I needed to control my emotions and to ignore gossip if I wanted to succeed,” he suggests.
For Narayan Aryal, “the most important thing is not to panic if your stock value decreases and not to get greedy when it spikes.”
Owing to the pandemic, the share market was closed for 98 days starting 24 March 2020. Since its resumption, the market has literally taken off.
More and more people are trading online, again partly due to the pandemic. According to NEPSE, 20.55 percent investors traded online as of August 13; the percentage had jumped to 36 percent by September 30.
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