Nepse soars to five month highStocks soared to a five-month high of 1,709.82 points on Tuesday. Commercial banks led the rally with a jump of 37.56 points. Increasing possibility of local elections being held on schedule and a pick-up in margin lending also boosted the stock market.
Stocks soared to a five-month high of 1,709.82 points on Tuesday. Commercial banks led the rally with a jump of 37.56 points. Increasing possibility of local elections being held on schedule and a pick-up in margin lending also boosted the stock market.
The Nepal Stock Exchange (Nepse) index gained 33.6 points, hitting the highest level since November 15 when it reached 1,701.91 points. The Nepse began sliding after that date, sinking to 1,252.5 points on February 12. Stocks recorded an all-time high of 1,881.45 points on July 27.
Ram Krishna Tiwari, managing director of Oxford Securities, attributed the growth in the Nepse to investors thronging to buy stocks of commercial banks. “As most commercial banks are likely to produce a good financial report in the third quarter of the fiscal year, a large number of investors have started snapping up shares of banks with expectations of good returns,” he said.
Shares of commercial banks, which dominate the country’s secondary market, gained 37.56 points to close at 1,603.83 points. As a result, the sensitive index also surged 7.28 points to close at 370.95 points.
All commercial banks except NMB Bank gained on Tuesday. Nepal SBI Bank made the largest gain of 54 points, followed by Standard Chartered Bank (49 points), Siddhartha Bank (35 points), NIC Asia Bank (33 points) and Machhapuchchhre Bank (31 points). Likewise, Everest Bank and Nabil Bank each gained 25 points. Shares of NMB Bank shed Rs7 apiece to close at Rs660.
Almost all trading groups gained on Tuesday. The insurance sub-index increased 101.88 points, development banks 56.76 points and manufacturing observed a gain of 21.6 points. Along with the index, the market also witnessed a notable turnover of Rs1.9 billion. Regarding individual companies, Nepal Credit and Commercial Bank saw the largest turnover of Rs90.54 million.
Tiwari said an upbeat mood created by increasing possibility of local elections being held and a rebound in margin lending due to a better liquidity position among banks fuelled the secondary market. “Recently, banks have revised their loan portfolio to invest in stocks,” he said.
Following the sharp rise in stocks, market capitalisation amounted to Rs1,964.71 billion.