Nepal Stock Exchange (Nepse) dipped 23.78 points to close at 1,629.75 points last week, as demand for shares fell outside Kathmandu Valley due to floods in Terai.
The secondary market that opened at 1,653.53 points on Sunday lost 11.4 points to close at 1,642.13 points. The stock market was closed on Monday due to a public holiday. Trading resumed on Tuesday with the market shedding 12.97 points to close at 1629.16 points.
The market however gained 3.5 points on Wednesday before falling again by 23.78 points on Thursday. As a result, the overall market index fell by 1.43 percent.
Parmeshwor Bhakta Malla, managing director of Malla and Malla Stock Broking Company attributed the fall in Nepse index to the flood that deluged large plots of land in Tarai.
“Due to the calamities, there was a massive fall in stock demand from investors who had been transacting from the remote work stations being operated from the flood affected areas,” Malla said.
According to Malla, many Tarai-based people returning home from the Valley had helped reduce stocks’ demand further. “In addition, they were pressured to sell their stocks in a hurry to raise money for expenses in the aftermath of flood.”
The sensitive index that measures the performance of Group ‘A’ companies also declined 4.69 points to close at 342.34 points with a fall in index of commercial banks along with majority of other trading groups.
With a fall in the market index, the value of shares listed on the stock market also went down Rs27.68 billion, with the market capitalisation reaching Rs1,911.76 billion from Rs1,939.44 billion over the week.
Of the nine trading groups, seven posted loss in their indices. Insurance lost 155.5 points, the largest loss of all, to close at 9,241.98 points. Malla said it was normal to see investors rushing to sell high value stocks during emergencies. “This has largely affected the transaction of insurance group,” said Malla.
Manufacturing was the second largest loser, with the group dropping 124.2 points to close at 2,628.71 points. It was followed by hotels (51.85 points), hydropower (51.33 points), development banks (34.1 points), commercial banks (16.54 points) and ‘others’ lost 8.96 points.
Finance companies were the only gainer over the review period. The finance companies added up 1.09 points in the index to close at 823.6 points. The sub-index of trading was stable at 214.11 points throughout the weekdays.
Of the individual companies with the largest transaction amount, Nepal Life Insurance led the segment. The company saw Rs144.86 million worth of shares being transacted. Malla said, “Mainly the investors with long-run perspectives have been attracted towards the stocks of Nepal Life Insurance.”
National Hydropower, with transaction of its stocks worth Rs141.05 million was in second position. Likewise, Standard Chartered Bank, Prudential Insurance Company and Forward Community Microfinance Bittiya Sanstha were also among the top five companies with largest turnover at the secondary market.
Likewise, Nabil Balance Fund 1, topped in terms of number of transaction with 1,492,000 shares exchanging hands.
Last week, shares of 178 listed companies were traded. Along with a fall in Nepse, the transaction amount also plunged 19.95 percent to Rs3.05 billion. The traded number of shares also declined to 8,446,460 units from 12,103,580 units.
Right Shares/Bonus Shares
Company Type Units
Mahuli Samudayik Laghubitta Bittiya Sanstha General 400,000
Seti Finance Bonus 57,108
First Microfinance Development Bank Right 1,322,500
Nerude Laghubitta Bikas Bank Right 900,000
Sanima Bank Right 211,047