Stocks take off as local level polls look more likelyInvestors laughed all the way to the stock market on Tuesday as local elections looked like a strong possibility.
Investors laughed all the way to the stock market on Tuesday as local elections looked like a strong possibility. The Nepal Stock Exchange (Nepse) index soared 76.79 points to close at a three-month high of 1,610.62.
The establishment of more remote work stations outside the Kathmandu Valley also helped share prices to rise, stockbrokers said.
The Nepse opened at 1,533.90 points and followed an upward trend to peak at 1587.65 before falling to the day’s low of 1562.88. The index shot straight up after that and crossed 1,600 points.
The circuit breaker was applied thrice during the day after the secondary market saw an abnormal growth in trading.
Nepse halted trading at 11:38am after the index rose 3 percent. The second time the circuit breaker was applied was at 1:26pm when the market surged 4 percent. Trading was closed at 1:59pm after the index gained more than 5 percent.
The last time the Nepse reached such heights was on December 1 when it closed at 1,600.49 points. The index sank to an 11-month low of 1,296.23 points on February 9.
The stock market began rebounding from last week with the daily transaction volume swelling to an average of Rs1.15 billion. The daily turnover has been stuck at the Rs400 million level all during the past year.
Stockbrokers attributed the sharp growth to an increase in investor confidence in the share market. Santosh Mainali, general secretary of the Stockbrokers’ Association of Nepal, said investors were rushing to buy shares due to the rebound in recent days.
Narendra Raj Sijapati, managing director of Kalika Securities, said investors could have been encouraged by the increased number of remote work stations. Last week, the Securities Board of Nepal issued permits to six more remote work stations to conduct operations from locations outside the Valley.
“A large number of investors have started investing in the secondary market from these remote work stations,” said Sijapati, who recently opened a remote work station in Nepalgunj.
Deepesh Vaidya, managing director of Kriti Capital and Investments, said investor confidence had been boosted as local elections look more likely. “In addition, the liquidity problem has eased, and this could have helped the market to rise.”
Almost all the sub-groups observed a gain in their indices on Tuesday. The insurance index saw the highest increase of 503.11 points to close at 7,933.38 points.
Similarly, the hydropower index rose 106.51 points, the development banks index rose 82.97 points and the commercial banks index rose 75.09 points. Hotels gained 71.09 points while finance companies and others increased 38.94 points and 10.12 points respectively.Nepal Bangladesh Bank witnessed the largest turnover of Rs94.99 million. The overall turnover at the market was recorded at Rs1.39 billion.