Nepse just shy of 1,500 pointsContinuing its record-breaking run, Nepal Stock Exchange (Nepse) on Thursday rose 2.91 points to close at yet another high of 1499.32 points.
Continuing its record-breaking run, Nepal Stock Exchange (Nepse) on Thursday rose 2.91 points to close at yet another high of 1499.32 points.
The market recorded a turnover of Rs1.08 billion on the day, which saw 5,345 transactions of 134 companies. Around 1.9 million shares changed hands. During the first hour’s trading, the benchmark index had hit 1507.77 points.
Stock analysts attributed the growth seen in recent days to good financial results of commercial banks and excess liquidity in the banking system that resulted in easy availability cheaper margin loans.
“Major factors pushing the market up are good financial reports of commercial banks, no mandatory provision for carrying out credit rating for companies issuing new shares and excess liquidity in the market,” said Prakash Tiwari, financial analyst and manager at Hathway Investment. “The insurance and commercial banking sectors are driving the market these days.”
Previously, the investors were sceptical about the issuance of right’s shares before the next fiscal year amid talks of mandatory credit rating provision, but the authorities did not take any step towards its implementation, raising hopes of early issuance of right’s shares.
“The positive expectation regarding growth of ‘earning per share’ of banks, issuance of right’s and bonus shares can increase the supply of bank’s shares by 50 percent in the upcoming days,” said Tiwari, “Moreover, expectations of a hike in paid-up capital requirement for insurance companies have also pushed the market up.”
Thursday’s growth was led by the insurance sector which rose 33.92 points. It was followed by development banks, hydropower and finance companies. Moreover, the market is also witnessing a rise in the number of new investors lured by the current bull run. “Such a rise in the number of shareholders who do not understand the true nature of events and base investment decisions on rumours can lead the market towards crash sooner or later,” said Tiwari.