Nepse plunges 14.29 pointsNepal Stock Exchange (Nepse) slid 14.29 points last week as investors lost confidence in the market’s ability to give high returns coupled with the uncertain political situation gripping the country.
Nepal Stock Exchange (Nepse) slid 14.29 points last week as investors lost confidence in the market’s ability to give high returns coupled with the uncertain political situation gripping the country.
The secondary market opened at 1,642.87 points on Sunday and plunged 16.63 points to close at 1,627.24 points. Monday saw the market dropping another 10.84 points to close at 1,616.4 points. The market rebounded on Tuesday and Wednesday, gaining 10.11 points and 3.07 points respectively.
The late surge seen in the four day trading week was not enough to offset the huge losses posted early in the week and saw the market decline by 0.86 points. Nepse had observed a similar fall in the previous week as well.
Narendra Raj Sijapati, managing director of Kalika Securities, said the market was mainly affected by predictions of adverse political development.
“The dilemma for holding second phase of local election in the remaining four provinces amid the ongoing changes in the government along with the issues posted by political parties in relation to the constitution spooked investor confidence in the secondary market,” he said.
Along with the Nepse index, the sensitive index that measures the performance of Group ‘A’ companies also plunged 3.95 points to close at 345.99 points. The commercial bank sub-index—the group with the most shares in the secondary market— lost 19.43 points.
Four other sub-indices posted losses over the review period. Insurance witnessed the largest fall, dropping 128.58 points to close at 8,758.75 points. The Nepse of hotels posted the second largest loss with its index shedding 51.25 points to close at 2,244.74 points. Hydropower and development banks lost 25.44 points and 5.72 points respectively.
To explain the huge fall posted by insurance sub-index, Sijapati said that Insurance Board was in the process of issuing new licences in the insurance segment and investors were hesitant to purchase stocks of insurance firms. He further added, “Many investors have expressed their woes on the possible drop in share price of existing insurance companies due to new insurance companies’ shares entering the market.”
The remaining sub-indices in the sensitive index managed to avoid posting losses. Manufacturing posted the largest gain of 137.18 points while the sub-groups of finance and ‘others’ gained 6.45 points and 4.05 points respectively. ‘Trading’ group was stable at 212.76 points throughout the week. According to Sijapati, there
was a surge in demand for Himalayan Distillery’s stocks as the company was likely to issue right shares soon.
With the fall in the market index, the average value of the shares listed in stock market also fell Rs16.63 billion, with market capitalisation dropping to Rs1,898.09 billion from Rs1,914.72 billion over the week. As a result, the stock market investors have lost Rs27.56 billion in the last two weeks.
Himalayan General Insurance observed the largest turnover of shares worth Rs137.68 million. According to stockbrokers, the company posted the largest turnover for two consecutive weeks after the company declared 1.66 percent right shares to its shareholders.
Similarly, Rs126.36 million worth of Siddhartha Bank’s stocks were transacted. Standard Chartered Bank Nepal, Nepal Bank Limited and Nepal Life Insurance round up the top five companies with the largest turnover.
Lalitpur Finance Company topped the list of transacted shares, with 444,000 units exchanging hands.
Last week, the shares of 155 listed companies were traded. Despite the fall in the index, the transaction amount increased by 4.27 percent to Rs2.69 billion.
The traded number of shares dropped to 4,567,090 units from 8,326,220 units.
Right Shares/Bonus Shares
Company Type Units
Samata Microfinance Bittiya Sanstha General 316,000
Rural Microfinance Development Centre Bonus 629,200
Kamana Bikas Bank Bonus 1,427,743.30
Kumar Bank Bonus 5,680,391.29
Asian Life Insurance Bonus 1,342,655.40
Mithila Laghubitta Bikas Bank Bonus 64,501.20