Nepal Stock Exchange (Nepse) gained 63.4 points to close at 1,651.04 points last week. Investors were attracted by insurance shares on the back of new regulations that will force insurance companies to raise their paid up capital.

The secondary market opened at 1,587.64 points on Sunday and gained 79.47 points to close at 1,667.11 points.  The massive gains coincided with the Insurance Board asking insurance companies to raise their paid up capital. It is now mandatory for insurance companies to have Rs2 billion in paid up capital while non-insurance companies need to have Rs1 billion.  The sudden gains in Nepse prompted the index to impose a circuit breaker, halting all trades halfway into the trading session.

On Monday, the market slipped by 6.59 points to close at Rs1,660.52 points. In the four day trading period, the market index fell by 3.5 and 5.98 points on Tuesday and Thursday respectively. The capital market rose 3.99 percent.

“The market was mainly influenced by the regulation for increasing paid up capital for the insurance companies,’ said Satish Kumar Shrestha, managing director of Siprabi Securities. According to him, some investors who were deterred by the high prices of insurance stocks focused their attention on buying up shares of commercial banks instead. “This led to a significant surge in the market index.”

Along with Nepse, the sensitive index that measures the performance of Group ‘A’ companies also rose, gaining 12.65 points to close at 358.47 points. The sub-index of Commercial banks showed the highest gains, up by 53.43 points .

With Nepse picking up positive growth, the value of shares in the stock market also increased by Rs78.4 billion with the total market capitalisation at Rs1,883.31 billion.

The sub-indices of hydropower and ‘other’ were the major losers in last week’s round of trading, losing 14.31 and 3.76 points respectively. The rest of the indices witnessed positive growth.Insurance sub-index saw a massive gain of 828.17 points to close at 8,679.16 points. In the past few weeks, stock prices of insurance companies have continued to rise steadily.

Hotel sub-index gained 74.97 points to close at 2,139.34 points. The sub-indexes of development bank, commercial bank and manufacturing also posted double-digit gains of 55.11, 53.43 and 31.09 points respectively.  Finance sub-index gained 8.84 points while trading sub-index gained 1.41 points.

Last week, Nepal Bank observed the largest turnover amount of Rs397.39 million. According to Shrestha, investors were attracted by the availability of right shares (23%) offered by Nepal Bank. 

Similarly, Nepal Credit and Commerce Bank saw transactions worth Rs384.62 million. National Life Insurance, Lumbini General Insurance and Shikhar Insurance were among the top five companies in largest turnover.

Siddhartha Equity Oriented Scheme had the largest amount of shares traded, with 934,000 shares exchanging hands.

Last week, the shares of 155 listed companies were traded. Despite the rise in Nepse, the amount of transactions dropped 9.08 percent to Rs6.54 billion. The total number of shares traded also depressed to 11,062,610 from 14,041,010 units.

Right Shares/Bonus Shares

Company                                                  Type          Units

Machhapuchchhre Bank                      Bonus        8,018,900

NMB Bank    Bonus    10,317,118

Bijaya Laghubitta Bittiya Sanstha       Bonus      210,000

Siddhartha Bank                                    Bonus      14,732,627

Birat Laxmi Bank                                    Bonus       786,912

Cosmos Development Bank                 Bonus      118,737

Womi Microfinance Bittiya Sanstha    Bonus    108,000

Machhapuchchhre Bank                       Right     19,322,700