COVID-19 and the equity market in Nepal

Markets, by their nature, like certainty, guided as they are by the projections and probabilities based on historical data and events. Future results are estimated based on past ones and changing socio-economic realities. Their performance and the socio-economic environmental factors are monitored and adjusted in their projected year-end results on regular basis. This helps smoothen the effects of uncertainty to a large extent. Projected positive or negative results are reflected in stock charts through the scrip’s price movement.

But whenever there is a man-made or natural calamity, it creates greater uncertainty, which is not factored in future estimates. Markets are suddenly coerced into uncharted territories and experience a rude awakening. The surprise quickly turns into fear. The fear of the unknown. Immediate reaction is “fight or flight”—some will hold their ground and try to weather out the storm while others will give up and escape.

In the markets, the flight response is seen when people start to push the sell button. As more people go into flight response, panic sets in. Panic leads to further panic and the result is a bloodbath on the trading floor.

In December 2019, Chinese authorities identified a new Sars-like virus emerging and affecting people in the city of Wuhan in Hubei province. As this new virus, now named COVID-19, started to rapidly spread in the city, the authorities enforced complete lockdown of the affected area to slow the spread of the virus. The global market ignored the situation as a one-off that would soon be contained. The last trading day of 2019 ended on a positive note for major global markets including the stock exchanges of Shanghai and Hong Kong.

Year 2020 brought in more news of virus spread, deaths and quarantines. By mid-February, the virus had spread to South Korea, Japan and Iran. Now, the effect was seen in the South Korean and Japanese equity markets as they started to plunge. On February 27, all major US indices—the Dow Jones, S&P and the NASDAQ—went into a deep correction mode. The virus continued to move across the borders.

On March 11, the World Health Organization declared COVID-19 outbreak to be a pandemic. The announcement shocked all the major equity markets. Markets from South Korea to Indonesia to India to United States hit multiple circuit breakers as the fear took over. Even the multiple circuits were unable to stop the plunge in stock values, leading to the possibility of a global recession.

In Nepal, the secondary market had just had a bullish run when COVID-19 happened. The month of February saw a big bull run. It was further fuelled as the projected returns from the secondary market looked more attractive than the returns from other alternative investment avenues. Steep rise in the index from 1,100-ish to 1,600+ (a gain of 500 points) within a span of three months was begging for a correction. This correction was set in motion on the very first trading day of March.

From a technical perspective, the correction was expected to end around 1,400ish, which would have been 50 percent retracement from 1,100-ish. The market even respected the support level of 1,400-ish on March 5. But the growing panic in global markets also spread into the hearts and minds of Nepali investors and traders. This was immediately reflected in the multiple circuit breakers on March 10 and continued decline in the index. The confidence level of investors and traders has hit a low and this is reflected in the declining volume of trading.          

NIBL extension counter at Duwakot

Nepal Investment Bank Limited has expanded its operations in Bagmati Province with the establishment of an additional extension counter at Duwakot, Changunarayan Municipality. The new extension counter in Ward No. 3 Duwakot is surrounded by Bhaktapur Municipality to south and Madhyapur Thimi Municipality to the west. Located around 20 km from the center of Kathmandu, Duwakot will run as a full-fledged extension counter to cater to the local demand.

It is NIBL’s 17^th extension counter, started with the intent of aiding financial accessibility of its customers and widening financial literacy. NIBL has been catering to its customers from 82 branches, 124 ATMs, 17 extension counters, 10 revenue collection counters and 56 branchless banking counters.

OPPO launches F15 in Nepal

OPPO has come out with its latest handset OPPO F15 through its first ever online launch event in Nepal. Featuring a 48MP Ultra-Wide Angle Macro Quadcam and super sleek design, OPPO F15 offers a refreshing professional photography experience in the palm of your hands.

F Series is designed to help the young generation chase better visual expression and strive for quality, trendiness and a better life, and has won great customer love. The launch of OPPO F15 marks a new era for the series, following its continuous technological advancements based on market needs.

Priced at Rs 39,990, OPPO F15 will go on sale from Marc 23 in two stunning colors: Lightning Black and Unicorn White.