Nepse posts gain of 10.88ptsNepal Stock Exchange (Nepse) rose 10.88 points to close at 1,615.19 point last week as investors were buoyed by the formation of a new government led by the democratic political party.
Nepal Stock Exchange (Nepse) rose 10.88 points to close at 1,615.19 point last week as investors were buoyed by the formation of a new government led by the democratic political party.
The secondary market that opened at 1,604.31 points on Sunday dropped 10.5 points to close at 1,593.81 points. On Monday, the market picked up 8.84 points to close at 1,602.65 points. Tuesday saw the biggest gain of the week, with the market picking up 32.72 points as a new government was formed. However, the market fell on Wednesday and Thursday, losing 14.24 points and 7.94 points respectively.
Ram Krishna Tiwari, managing director of Oxford Securities, said the market observed nominal growth due to the formation of new government which was offset by the soaring interest rate. “Despite the positive role of the political development, the market was affected by the high interest rate that the banks have been charging against their loan portfolio,” Tiwari said.
According to him, banks have been charging at least 13 percent on the loan against shares. “Similarly, the financial institutions have reduced the individual overdraft facility to Rs7.5 million from Rs10 million.”
This meant that the average value of shares listed in the stock market also jumped Rs12.73 billion, with market capitalisation rising to Rs1,889.69 billion from Rs1,876.96 billion over the week.
Along with the Nepse index, the sensitive index that measures the performance of Group ‘A’ companies also increased 2.78 points to close at 343.12 points. Out of the nine trading groups, only three managed to post gains in their indices. The sub-index of development banks posted the largest gain of 19.45 points while commercial banks gained 16.38 points. The last sub-index to post a gain was ‘Others’, adding 14.17 points. Tiwari said the possibility that Mahesh Acharya of Nepali Congress taking charge of Finance Ministry had attracted the investors to pick up shares of banks. According to stockbrokers, Mahesh Acharya is one of the political figures that investors like due to his past reforms in financial sectors.
Insurance witnessed the largest fall of 62.97 points to close at 8,551.9 points. Tiwari considered the fall as reasonable. “As the listed companies in the group have been hovering at one of the highest share prices, the fall is not significant,” he said.
Hotels was the second biggest loser, dropping 27.81 points to close at 2,213.67 points. Likewise, manufacturing lost 13.41 points, hydropower 10.43 points and finance companies 4.4 points.
The sub-index of trading remained stable at 212.76 points throughout the week.
Standard Chartered Bank Nepal observed the largest turnover of shares worth Rs301.2 million. According to Tiwari, the bank posted largest turnover of its shares as many investors started booking profit from selling the bank’s further public offerings that were listed in the secondary market last week. “Likewise, buyers are also expecting that the bank will provide good dividends next year.”
Similarly, Nepal Life Insurance stocks worth Rs121.98 million were transacted. Civil Bank, Nepal Investment Bank and Himalayan General Insurance were also among the top five companies with the largest turnover.
Civil Bank topped in terms of number of transacted shares, with 452,000 units. Last week, the shares of 159 listed companies were traded. With the rise in the index, the transaction amount also inclined up 17.64 percent to Rs3.35 billion. The number of traded shares also increased to 5,943,010 units from 5,121,160 units.
Right Shares/Bonus Shares
Company Type Units
Bank of Kathmandu Bonus 10,526,850
Reliance Finance Bonus 668,571.48
NMB Microfinance Bittiya Sanstha Right 552,000