KATMANDU, Nepal — There was no Black Monday in Katmandu.
When panic hit the great stock markets in New York and Tokyo and London last month and sent the price of shares tumbling, the tiny Nepal Securities Exchange stood as solid as the Himalayan mountains that tower over Katmandu.
Shares in the Yak and Yeti, a local hotel, remained unchanged--and unavailable.
Someone who bought into Nepal Bank a year ago for the equivalent of $4 a share could have sold easily for nearly five times that figure. But almost no one did. Only five shares in the bank changed hands in October.
That is the main problem at the 4-year-old Nepal exchange, one of the world's smallest, housed in a converted two-story residence where the Big Board is a chalkboard. Many people want to buy stock in the 25 companies listed, among them a noodle manufacturer and the local Coca-Cola bottling franchise, but almost no one ever wants to sell.
In the brief history of the Nepal exchange, which was nurtured in its early stages by U.S. Ambassador Leon J. Weil, a former Wall Street investment banker, only one stock has ever shown a decline in value, and that came only after the company went bankrupt.
"The trend of prices in our market is always going up, no matter how the company is doing," the exchange's executive director, Damber Prasad Dhungel, told a recent interviewer.
Dhungel, 44, an economist who went to New York on a State Department grant to study the New York and American stock exchanges, hopes the October crash on the world markets will have a positive effect on the Nepal exchange.
Before the crash, he said, few investors here associated the purchase of stock with the possibility of losing money. There was no risk, and nearly every stock offering was oversubscribed.
If anyone should ever want to sell a share of stock--there were 26 transactions in the month of October, involving $54,000--there are hundreds of investors ready to buy. Dhungel said he is sometimes forced to send his staff into the city to encourage people to sell, just to keep the market alive.
But after Black Monday, he said, he received a few tentative telephone calls from investors who were concerned about their money.
"I think it woke people up," he said. "They really started paying attention to the stock market."
The philosopher and theologian St. Augustine observed that there is no possibility of success unless there is also the possibility of failure, and Dhungel realizes that before the Nepal exchange can become a truly active market it must introduce the awareness that an investor can possibly lose his Nepalese tunic, if not his shirt.
Possibly one of the first signs of the new Nepalese awareness of the vagaries of stock investment came recently when a new company headed by an American, a former Ford Foundation official here, made a public offering through the exchange for stock with an initial value of $462,000.
In all previous offerings on the exchange, new stock was instantly oversubscribed, with purchasers selected in a lottery system. But in the case of Indreni Soybean Industries, a company headed by American Abraham S. David, the public offering was made on Oct. 25 and more than a week later only 70% of the stock had been subscribed.
In any other market, this would have been considered a great success, but on the Nepal exchange it was slow going.