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Kathmandu Friday July 20, 2001 Shrawan 05, 2058.
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Index falls again
Post Report
KATHMANDU, July 19 - Fall in the Nepal Stock Exchange (Nepse)
Index continued even today with the Index plummeting by 5.26 points to touch 337.88. The
Index in the past two days has already fallen by almost 10 points since the July 16th
close of 352.25 points.
The series of plunge in the Index during past three days is a
testimony to the earlier artificial rise in the prices of shares for a week after the
budget was announced on July 9. Since the fluctuations in the prices of shares is
reflected by the change in the Nepse Index, any change in the Index means a change in
stock prices in the same direction.
Prices of stock rose till July 16 and then began to recede
indicating a game-plan of investors and brokers to raise the stock prices to its maximum
for minimizing tax burden.
Finance Minister Dr Ram Sharan Mahat in the budget for the
current fiscal year had announced to impose capital gains tax of ten per cent on the sale
of corporate securities taking the stock prices of July 16 as the base. It means that ten
per cent tax would be charged on any profits made during transaction from July 16, where
the transacting value is above the base price.
Since the share prices had been on the wane for the past few
months prior to the budget announcement, a sudden upturn in the stock market following the
budgetary announcement to tax capital gains had raised the suspicion of experts.
Experts in the field had accused the investors and brokers of
engaging in foul-play for tax evasion. They claimed that the stock prices were manipulated
by dummy transfer of securities at inflated values.
However, refuting claims that the stock market fluctuations
were artificial, brokers and investors alike claimed that the prices of shares fluctuated
normally. They maintained that rise in the share prices in the week after the budget
announcement was normal for any fiscal year end.
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