Liquidity crunch continues to haunt stock marketBonuses and cash dividends failed to lift the overall negative market sentiments.
The index closed on Thursday at 1,1112.79, down from 1,120.60 a week ago. The total turnover was worth Rs243,391,320 during the day while the total traded shares stood at 1,271,006. There were 4,541 transactions in all and as many as 166 scrips were traded. At the end of last week, the total market capitalisation stood at Rs1,411,953.22 million.
"The overall volumes have continued to disappoint investors with average trading per day ranging between Rs20 crores to Rs25 crores during the week," a portfolio manager from ARKS Capital Adviser's Ltd told the Post.
Like last week, NMB and Nepal Bank continued having the highest turnover among the traded scrips. Global IME Bank and Janata Bank finalized their merger during the week.
"This, hopefully will set an example for other banks to follow suit as Nepal Rastra Bank is hoping to bring the number of commercial banks below 10 from the existing 27 commercial banks at the moment," said a market participant.
Among the sub indices, hydro power continued to perform the worst with more than a dozen of hydro power company stocks trading below Rs100. For an economy betting big on hydro projects, it sends a negative sentiment among investors.
During the course of the week, Sanakisan Lagubitta declared 27.25 percent bonus and Rs1.44 cash dividend, Prime Commercial Bank declared a 16 percent stock dividend while Kailash Bikas Bank, which is being acquired by Prime, declared a 16 percent stock and 2.77 percent cash dividend. Likewise, Swabhalambhan Lagubitta also declared a 26 percent stock dividend and 14 percent cash dividend to its shareholders.
However, bonuses and cash dividends failed to lift the overall negative market sentiments.
"In the coming weeks, the market will continue to under-perform despite handsome dividends being declared by various listed companies. The credit crisis in the banking system continues to be a stumbling block that's preventing the market from heading north," said the ARKS Capital manager.