11 August 2024, Kathmandu
The Nepali stock market experienced a significant uptick on the first day of the week, with the index soaring by 94.53 points to reach a turnover of Rs. 25.77 billion.
Low-Cap Stocks Surge
This marks the highest turnover recorded to date. Driving this surge was a notable investor interest in low-cap companies, with shares of nine companies hitting the upper circuit limit.
National Hydropower Company led the pack, followed by Nerude Mirmire Laghubitta and HIDCL. Other companies experiencing a similar trend included Khanikhola Hydropower, Akhukhola Jalvidyut, Upper Tamakoshi Hydropower, Shubham Power, Atmanirbhar Microfinance, and Mid Solu Hydro.
While these companies have shown impressive growth, investors are cautioned to conduct thorough research before making investment decisions. Factors like earnings per share, net worth, and dividend history should be carefully considered.
About Low-Cap
Low-cap companies are those with relatively small market capitalizations. These are typically young, growth-oriented businesses with high potential but also increased risk. Due to their smaller size, they often have more room for expansion than larger companies.
Investing in low-cap stocks can be rewarding, with the potential for significant returns if the company proliferates. However, it’s important to understand that these stocks are generally more volatile than those of larger companies. Their prices can fluctuate wildly based on market conditions, company performance, and investor sentiment.
Because of the inherent risks, investors often adopt a long-term perspective when considering low-cap companies. Diversification across different stocks and sectors is crucial to manage risk effectively.