Nepal Stock Exchange (Nepse) plunged 30.1 points to close at 1,559.49 points last week, as banks were reluctant to issue more loans, with the end of the fiscal year approaching.
Nepal Stock Exchange (Nepse) plunged 30.1 points to close at 1,559.49 points last week, as banks were reluctant to issue more loans, with the end of the fiscal year approaching.
The secondary market that opened at 1,589.59 points on Sunday lost 13.61 points to close at 1,575.98 points. On Monday, the market fell 20.82 points to close at 1,555.16 points. On Tuesday, the index dropped by 4.09 points before gaining 3.62 points and 4.8 points on Wednesday and Thursday respectively. Overall, the market index slipped 1.89 percent.
Ram Chandra Bhattarai, managing director of Aryatara Investment and Securities, said the market was influenced mainly by the banks controlling lending to investors.
“With the end of fiscal year approaching, investors failed to receive loans from banks, which has hit investment in the secondary market,” said Bhattarai, adding that the market shedding points in first three days of trading was also due to a number of investors selling shares to pay off the interest against the bank loan.
Along with the Nepse index, the sensitive index that measures the performance of Group ‘A’ companies also declined 6.71 points to close at 330.9 points. Bhattarai said the possibility that Nepal Rastra Bank is likely to reduce the spread rate through the monetary policy has affected the demand for the banks’ shares. “The investors suspect a fall in banks’ profit in future with reduction in spread rate.”
During the review period, majority of the sub-indices landed in the red zone except for trading. Insurance lost the maximum of 188.73 points to close at 8,188.98 points. Manufacturing lost 35.83 points to close at 2,375.98 points.
Hydropower lost 33.71 points, followed by commercial banks (31.91 points), development banks (26.7 points), hotels (17.34 points), finance companies (11.54 points) and ‘others’ (0.29 points). The index of trading was stable at 212.76 points throughout the weekdays.
With a double digit fall in the market index, the average value of the shares listed in stock market also declined Rs33.55 billion with market capitalisation reaching Rs1,826.32 billion from Rs1859.87 billion over the week.
Everest Bank observed the largest turnover of shares worth Rs300.68 million. Bhattarai said the bank announced 33 percent right shares and observed its book close last week. “This has lured investors to purchase the bank’s shares.”
Similarly, Prime Life Insurance’s shares worth Rs176.1 million were transacted. Everest Insurance, promoters’ shares of Prabhu Bank and Standard Chartered Bank Nepal were also among the top five companies with largest turnover.
Likewise, Prabhu Bank topped in terms of shares transacted, with 780,000 units exchanging hands.
Last week, the shares of 164 listed companies were traded. The transaction amount declined marginally 0.02 percent to Rs2.96 billion. The traded number of shares however increased to 5,292,060 units from 4,908,060 units.
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