Page 4 - MEX Express - Vol 5 Issue 4
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www.mexnepal.com                                    MARKET PERSPECTIVE                                                                                        Volume: 5 • Issue: 4 • Year: 2013 A.D

Inter market analysis                                                                                    • Commodity                       •Currency          be purchased by Japanese investor then this
                                                                                                           price action                    Performance        investor has to buy USD ($) first to invest into
    All markets are now interconnected with each other; few are closely correlated, positively or
negatively and can be experienced easily and this phenomenon was first studied and developed                                                                  U.S. government Bond and this pushes the
by John Murphy.
                                                                                                                                                              demand of USD ($) which leads eventually
If something happens in one market then it affects another market. Simply the price of commodity
in one market affects the price of same commodity in other market. This co-relation analysis                             Commodity  Forex                     to increase the values of USD ($) and this
between markets is termed as Inter market analysis. It comprises with Commodities, Forex, Bonds,
and Stocks. Regardless of time, these markets react with each other during trading locally as well                                                            increased value of USD ($) decreases the price
as globally which predict the price of certain securities or commodities.
                                                                                                                                                              of Gold in most of time.
    Basic postulates about inter market relationship
                                                                                                                         Stock      Bond                      In the same way, Stocks of one country can
    1.	 Market are inter connected with each other nationally as well as internationally.                                                                     be bought by foreign investor and inward flow
    2.	 No market is isolated.                                                                           •Money Flow                       •Rate of           of money leads to gaining power to native
    3.	 One market impact to rest of the market.                                                            in stocks                      Interest           currency and finally affects commodity price
    4.	 Commodities, Forex, Bond and Stock are categorized as major market.                                                                 Effects           again.

While analysis of commodity, Inter market Trader also analyses the forex i.e. how currencies are         thought to be a hedging instrument for portfolio     “In common man language, Bond market or
performing, Bond Market for rate of interest, Stock market for impact of flow of money in capital        risk mitigation. The South African gold’s output     Stock market affects Forex market and FX-
market and impact of worldwide market trend.                                                             throw in recent years due to numerous strikes in     market affects Commodity market.” hence it
                                                                                                         the mining production. Hence, any changes in the     is always advisable that investor must keep
These three currencies Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand                       extraction of gold ores in South Africa will impact  eye over all the market to get good result in
Dollar (NZD) can be considered as major commodity price driver which move with the rate of               to South African Rand.                               commodity trading.
commodity price in positive correlation. For example, AUD is positively correlated with Gold and
vice-versa. Australia is one of the world’s largest gold exporters that is why Australian Dollar is      In today’s era, investors are highly responsive to   Vikash Agrawal
strongly related to gold whereas United Kingdom is one of the biggest importers of gold for both         global market, furthermore wherever opportunity      Managing Director
ornamental as well as investment purposes. This gives a strong positive reason to link GBP (£) to        comes, they become ready to invest. Bond can         Tills Investment Pvt.Ltd.
gold price. As we know there are several gold mines in Canada because of this, (CAD) Canadian            be bought by foreign investor, then he/she must      Jhoche-23, Kathmandu
Dollar is positively related to gold. Japanese Yen (¥) entails positive relation with gold as gold is    buy their currency first to invest into concerned
                                                                                                         Bond which gives pressure to demand of that
                                                                                                         currency and ultimately, it affects commodity
                                                                                                         price. For example, U.S. government Bond can

Economy & Constitution

    Historically, a rare election of the second     like Nepal must adjust the gaps between the          additional supply of electricity from India. For     NEA has the option to expedite the contract by
constitution assembly has formed the second         different sectors and segments of economy            the additional supply of current there would be      complying with existing legal requirements in
assembly and its newly elected members have         as per its objective existence. At a time all        procedure made for the change of conductors          India. In that case, there would have been no
sworn their oaths before Surya Bahadur Thapa        potentialities of economy should not be exploited    in Kushaha (Nepal) – Kataiya (India) 132 KV          delay in the project.
who enjoyed the chairmanship of assembly            for the betterment of economic growth. Nepal         Cross-Border Transmission line was one of            Government of India has taken concrete steps
after having the confirmation of being the eldest   has adopted two new markets behavior: stock          the medium term measures to improve power            to reduce load shedding in Nepal by supplying
member of assembly required for conducting its      markets and future markets. Between the two          situation in Nepal identified by an India- Nepal     maximum possible electricity on the existing
first meeting. Since its first meeting, the demand  markets, practice of future markets is newer         Joint Team of Technical experts in November          transmission lines and by helping to augment
of dissolution of the constituent assembly has      than stock markets in Nepal.                         2011. In July 2013 Nepal Electricity Authority       cross border grid connectivity to increase this
been raised by CPN-Maoist led 33 party’s front,                                                          (NEA) had requested Government of India’s            quantum up to 250 MWs. ‘
claiming they were forcefully set outside from      Naturally, the regulations and regulatory            consent to re-conduct the Indian portion of          Issue of supplying electricity is an imperative
the election even though they were the major        agencies are also newer than other countries         transmission line also through a Nepalese            task for the government. This shows negligence
stakeholders of the constituent assembly.           of the world. In India recently the discussion       contractor.                                          of authority performed by official. Such activities
                                                    of merger of regulatory bodies of the two                                                                 should be taken seriously for the economy.
Constitutionally Nepal has been declared as         markets has begun. Indian experiences shall be       But the procedural documents were not
Federal Republican state but oppositions have       better than other markets because Indo-Nepal         submitted to the channels of Indian government           What are the imperatives and potentialities of
been seen in constituent assembly opposing          societies have been sharing common culture           on time according to the Embassy of India.           exploitation of resources should be prioritizing
Federal Republican State. Though composition        and nature of behaviors. Nature of these two         In this concern India has clarified by issuing       first. Infrastructure sectors should be given
of assembly still favors pro Federal Republican     markets mainly depends on regular supply of          press release saying that the conductors and its     priority. Policy makers and law makers should
forces that only lifts the confidence of            electric current updating technology based           accessories which would be installed and retained    take care of such behaviors preserving national
promulgating constitution on due time otherwise     data and information for operating market            in India and also the tools and equipment which      sovereignty.
no one expecting that assembly will produce a       based businesses. It all depends on regular          would be temporarily imported for execution
strong constitution for the country.                supply of electric current but Nepal has been        of work are of third country origin. The release         Major issues of constituent assembly are
                                                    facing the scarcity of electricity although the      read further ‘Article III of the Agreement of        the distribution of natural resources and its
On the other hand all expectations are seen         potentiality of production of electricity is high    Co-operation to Control of Unauthorized Trade        exploitation. All stake holders should pave the
saying to pave away that leads sustainable and      in the country. Hydro-power projects have            between Nepal and India prohibits re-exports         way of economic growth filling the gap between
durable growth earning economy.                     been lagging behind the supply of electricity.       of third country goods without manufacturing         have and have-nots.
                                                    Government officials have widely criticized and      activity from one country to another. NEA
Technology based economy has been galloping         political leaders have been blamed of ignoring       has been informed that the Embassy has also                                     Dharmendra Karna
and swallowing employments in order to produce      people’s interest instead of falling in the rubbish  separately taken up this matter with relevant
strong Gross Domestic Production(GDP) and           of corruption. Hydro power projects should be        Indian Ministries for a one-time waiver.                                             Central Member
enhance a way of benefiting more profits for        integrated with irrigation receiving maximum                                                                                              Federation of Nepal
the richest of the world as recently Oxfam has      utility of such projects. Policy makers should                                                                                            Journalist (FNJ)
mentioned in its report recently released ahead     be alert granting permission for hydro power
of World Economic Forum. The report of Oxfam        projects and monitoring over given permissions.
is not to be considered only for the leaders of     Without power supply Nepal can’t change its
powerful countries and emerging countries           fate of poverty. The economic policy as whole
but also for the least developing countries like    depends on strong constitution but imperatives
Nepal that are to stand against poverty in the      should be fulfilled by the governments. Many
21st century .                                      say that extreme scarcity of electricity can be
                                                    moderated by requesting India. Possibly what
For the leaders of constituent assembly also        extent of electricity can be borrowed from India
such reports are important because they are         that much should be brought immediately, but
to prepare economic policy sustainable and          the delay of government officials has been
durable for at least 50 years or more to come.      seen in this regard. According to Madheshvani
Indeed not only Nepal, no country can exists        Weekly, 10 January, the government officials
without development of technology but country       had delayed forwarding procedure required of

Editorial Board: Lakshman Pandit / Liberty Shakya / Sharad Koirala / Shubhechchha Mulepati                                                                                              Page 04
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