Stocks crave right policy, not politics

The more efficient the market, the less the need for government policy handouts.

Banking and financial institutions’ margin loans for equities shot up 9 percent from mid-August to mid-September. The Rs 8.3-billion increase brings the total to Rs99.7 billion. In the prior month (mid-July to mid-August), these loans grew by Rs1.3 billion. At the end of the last fiscal year through mid-July this year, they stood at Rs90.1 billion. Banks are wallowing in excess liquidity, and interest rates are meaningfully lower from just a few months ago. More importantly, the latest surge in margin loans follows an expansionary policy adopted by the monetary policy for the fiscal year 2024-25, which, among others, scrapped the Rs200-million margin-loan cap for institutional investors.