Investors buoyed by banks’ mega merger planInvestors expect the share value of these banks to rise after unification with the well performing banks
Nepal Stock Exchange last week inched up 3.34 points to close at 1,260.5 points, after banks forwarded their mega merger plan to the central bank, which raised investor confidence.
Along with the market index, the average daily turnover also increased to Rs533.93 million last week from Rs504.6 million in the previous week.
The market which opened at Rs1,257.16 points on Sunday, fell 12.27 points to close at Rs1,244.89 points. On Monday, the market declined 2.85 points, followed by two days of successive gains on Tuesday and Wednesday, gaining 11.02 points and 15.68 points respectively.
On Thursday, the market fell again by 8.24 points. Eventually, the overall index rose by 0.26 percent during the review period.
Stock analysts said investors were mainly attracted to purchase shares of struggling commercial banks looking to improve their financial position through merger. “With these banks forwarding their merger plan to the central bank, investors expect the share value of these banks to rise after unification with the well performing banks,” said a stockbroker on condition of not disclosing their identity.
The sensitive index that measures the performance of Group A companies also added 0.3 points to close at 271.47 points.
With stock prices rising, investors gained Rs4.16 billion in the book value of their investment portfolio, as the market capitalisation inclined to Rs1,568.59 billion from Rs1,564.43 billion.
Out of the 11 trading groups, five posted gains during the review period. Non-life insurance gained the largest of 75.25 points to close at 5,125.96 points. Life insurance followed with an increased index of 73.06 points.
Likewise, microfinance gained 17.98 points while development banks and commercial banks added 8.58 points and 3.19 points respectively.
Of the losers, hotels shed 32.56 points while manufacturing dropped 17.08 points. Index of ‘others’ plunged 6.03 points and finance companies shrank by 4.6 points. Similarly, hydropower and trading indices lost 2.91 points and 2.62 points respectively.
Regarding the individual companies, Nepal Bank Limited saw Rs207.33 million worth of shares exchanging hands, the largest during the review period. It was followed by Prabhu Bank, Mega Bank Nepal, Shivam Cements and promoters’ shares of Global IME Bank.
Last week, stocks worth Rs2.67 billion were traded, which was 5.95 percent more than the amount in the previous week. The total number of traded shares also increased to 16,100,063 units from 7,658,917 units.
NEPSE listed 638,670 units of bonus shares of two microfinance companies — Mahuli Samudayik Laghubitta Bittiya Sanstha and Narude Laghubitta Bittiya Sanstha during the review period.