Nepal Stock Exchange (Nepse) plunged 37.38 points to settle at 1,542.65 points between September 4 and October 4 due to an increased selling pressure amid the slow rise in the demand for stocks. 

The secondary market that opened at 1,580.03 points on September 4 fell 25.47 points on the first day of the review period to close at 1,554.56 points. 

Over the one-month period, which involved a number of festivals including the biggest Dashain, the market went through a wide fluctuation. 

On September 13, the stock market went below 1,500 points to close at 1,493.2 points.

The market observed the largest fall of 34.89 points on September 10. 

The market that had underwent the downswing for consecutive eight days was relieved on September 14, when it gained 37.11 points, the largest value over the review period.

Stockbrokers attributed the fall in Nepse to the slow rise in investors’ demand for stocks amid a surge in supply. 

Ram Chandra Bhattarai, managing director of Aryatara Investment and Securities, said companies issuing large number of bonus and right shares contributed to an overwhelming supply of stocks in the secondary market. 

“In addition, many listed companies, in order to abide by the regulation of Securities Board of Nepal, have started shares allotment in the timeframe as low as 15 days compared to over two months in the past,” Bhattarai said, adding that the stocks supply increased fourfold. “However, the demand rose by just around 25 percent.”

Santosh Mainali, general secretary of Stockbrokers’ Association of Nepal, echoed Bhattarai. 

According to Mainali, the low demand for stocks was also due to low rate of returns offered by a number of listed companies recently. 

The index that measures the performance of Group ‘A’ companies also dropped 7.45 points to close at 323.87 points with a fall in index of commercial banks, development banks and insurance companies that dominated the country’s only stock market.  

With a fall in the market index, the average value of the shares listed in the stock market also went down Rs73.12 billion, with the market capitalisation reaching Rs1,790.41 billion from Rs1,863.53 billion over the review period.  

Of the nine trading groups, four posted loss in their indices. 

Insurance companies lost 396.39 points in the group’s index to close at 8,458.35 points. 

Stockbrokers considered the fall in insurance index a normal as the group had already been overpriced along with having limited number of stocks in transaction. 

Likewise, development banks lost 97.89 points to close at 2,006.89 points.

Manufacturing and commercial banks lost 52.82 points and 29.84 points respectively. 

Of the gainers, trading group added up the largest value of 19.76 points to close at 233.87 points. In the segment ‘others’, hotels, hydropower and finance companies followed the trading group. 

Stockbrokers expressed hope that the stock market could rise from the next week. Falling interest rate with an ease in loanable fund with the banks, the ongoing zeal shown by political parties for upcoming elections and financial institutions increasing their limit for loan against shares among others could take the market to a new height, the stockbrokers said.