• CA. Anal Raj Bhattarai

Nepalese stock market went down nearly one-third over the past few months and continues to fall. The issues of capital gain tax had further aggravated the nervousness in the capital market.

We understand that substantial amount of household liquid assets are invested in the stock-market and value of such assets is eroded by 33%. As Market is losing the value everyday, most of the middle class worried, whether they can recover their money or not. They are under constant pressure to liquidate the assets resulting firesale.

We understand government keeps firefighters to control fire as and when it occurs, it seems financial firefighters are busy shopping at market. If this trend continue many organization may have to suspend initial public or right shares offerings.

If authorities do not support capital market, it may lose its glory. Nepal will certainly not be the first country that is trying to prop up a falling stock market. Central banks of America, Europe, China, India and Japan have all adopted appropriate policy response and measures after crashes and cutting interest rates to cheer up bloodied investors.

Current situation is not out of control. Govt can still stimulate the market merely by introducing or amending few policies and can easily uproot the main cause of current free fall.