Nepse records Rs2.14b single-day transactionDespite political wrangling, the share market has continued a brisk business, with transaction volume on the Nepal Stock Exchange (Nepse) crossing Rs2.14 billion on Tuesday.
Despite political wrangling, the share market has continued a brisk business, with transaction volume on the Nepal Stock Exchange (Nepse) crossing Rs2.14 billion on Tuesday. This is the first time that the daily turnover has crossed the Rs2 billion mark in the new fiscal and second highest overall since hitting Rs2.19 billion on June 15.
Nepse has enjoyed the bull-run since the onset of the fiscal year 2016-17 as the capital market gained 82.32 points over the first three days of trading.
On Tuesday, the secondary market surged 13.9 points to close at 1,800.47 points—a new record.
Surge in transactions of commercial banks—which hold major stake in the capital market—was the major driving force behind the growth. Tuesday’s trading witnessed the index of the banking sub-group rise 35.48 points on the back of share transaction worth Rs1.22 billion.
Stockbrokers attributed the growth to investors’ expectations of dividends from the commercial banks at the start of the new fiscal year. Despite a prolonged blockade last
fiscal year, the banks have been performing admirably well.
Pralhad Kumar Oli, managing director of Pragyan Securities, said expectations that most of the banks would post good profits in the last fiscal had wooed investors in the segment. “Similarly, the investors are also attracted towards stocks of those banks that have come up for trading after completing their merger process,” he said.
In addition, the Nepal Rastra Bank’s recently unveiled monetary policy has also propelled Nepse. According to stockbrokers, setting the limit on direct lending to the micro-finance institutions (MFIs) has made the investors switch to the commercial banks.
Through the monetary policy, the central bank has asked the MFIs to maintain spread rate at 7 percent. Similarly, the NRB has also directed commercial banks to directly invest 2 percent of their
total loan portfolio to the deprived sector. Earlier, the banks used to invest 5 percent of their total lending through the MFIs.
Machhapuchhre Bank dominated Tuesday’s trading with a turnover of Rs302.51 million, followed by Nepal Bank Limited at Rs106.35 million. With a rise in Nepse, the market capitalisation has reached close to Rs2 trillion for the first time.