Nepal Stock Exchange (Nepse) index plunged 40.99 points to close at 1,345.99 points, the lowest mark over the last one year, as the specter of interest rates rising further and new governmental policies loomed over investors.

The uncertainty amongst investors continued for a second week, with the secondary market reflecting investor sentiment—losing nearly 80 points in just two weeks.

The market that opened at 1,386.98 points on Sunday shed double digits of 12.25 points to close at 1,374.73 points. On Monday, the market was down 15.78 points and closed at 1,358.95 points. However, the market gained 5.86 points on Tuesday before falling again by 18.82 points on Wednesday. The market remained closed on Thursday to mark the national holiday of Holi, the festival of colours. 

This resulted in the index declining by 2.95 percent over the week.

Stockbrokers attributed the plunge to the investors’ reluctance in purchasing stocks due to political uncertainty combined with the shortfall of liquidity in banks. “They are in dilemma regarding the policy to be implemented by the new government,” said a stockbroker, under condition of anonymity. “In addition, the information that the loanable fund with the banks have fallen to Rs13 billion which prompted the central bank to inject additional liquidity in the market has made investors skeptical on the possible rise in interest rates.”

The sensitive index that measures the performance of Group ‘A’ companies also decreased 7.87 points to close at 285.38 points with a fall in indices of all ten trading groups.

With a fall in the market index, the average value of shares listed on the stock market also went down Rs47.96 billion with market capitalisation reaching to Rs1,574.06 billion from Rs1,622.02 billion over the week. With the downfall in the stocks’ value, the investors have lost over Rs92 billion just in the past two weeks.

All ten trading groups witnessed downturn in their indices. Insurance lost the largest of 321.61 points to close at 6,677.35 points. Hydropower’s index dipped

74.89 points, followed by microfinance of 64.61 points, manufacturing of 53.22 points and hotels of 52.83 points.

Similarly, development bank lost 40.83 points, commercial banks lost 31.92 points, finance companies lost 14.94 points, ‘others’ lost 11.19 points and trading shed 8.53 points in its index.

Of the individual companies, Nepal Life Insurance Company led in terms of the transaction amount. The company witnessed a total transaction of Rs226.22 million. As per the stockbrokers, investors were attracted to purchase the insurer’s shares as the company had announced plans to provide 70.53 percent dividend to its shareholders. 

Likewise, Prabhu Bank with holding shares transaction worth Rs183.54 million was in second position, followed by promoters’ shares of Nepal Life Insurance, Prime Life Insurance and promoters’ shares of Rastriya Beema Company. 

Prabhu Bank led in terms of the traded number of shares. A total of 812,000 units of the bank’s shares were traded over the review period.

Last week, the stocks of 174 listed companies were traded. Despite a fall in the market index, the transaction amount escalated 15.04 percent to Rs1.96 billion. According to Nepse, the traded number of shares also increased to 4,526,550 units from 4,248,730 units. 

Right Shares/Bonus Shares

Company Type Units

Unnati Microfinance Bittiya Sanstha General 550,000