Secondary bourse in downward trend

• Provision to submit ‘know your customer’ details has hit Nepse

Kathmandu, July 28

The new provision introduced by the government to track the money being invested in the stock market spooked investors, thereby causing the Nepal Stock Exchange (Nepse) index to drop by 0.18 per cent or 2.19 points in the trading week between July 22 and 26, as per share market analysts.

Investors have to now mandatorily submit the ‘know your customer’ (KYC) forms to their respective share brokers while purchasing shares. The government made this provision compulsory from the start of this fiscal year.

“A lot of big investors buy shares with the black money that they have accumulated. At present, they may be in wait-and-watch mode to see how the government treats investments made through such illegal sources,” said Prakash Rajhaure, an independent stock market analyst. “This is why the secondary market has not gathered pace.”

Or else there is no other reason for the market to hover around the 1,200-point mark for so long, according to Rajhaure.

The benchmark index, which had opened at 1,193.39 points on Sunday, had gone down by 11.73 points by the end of the day to close at 1,181.66 points. It reversed course on Monday and Tuesday, rising by 12.84 points to 1,194.50 points and by 4.77 points to 1,199.27 points, respectively.

The optimism could not sustain, however, and the local bourse dipped by 4.92 points to 1,194.35 points on Wednesday and shed another 3.15 points to close the week at 1,191.20 points on Thursday.

Similarly, the sensitive index went down by 0.18 per cent or 0.46 point to 250.96 points and the float index also dipped by 0.24 per cent or 0.21 point to 85.41 points.

In a new development, Nepse has separated the insurance sub-index into life insurance index and non-life insurance
index from July 17.

In the review period, banking, development banks, hydropower, manufacturing, non-life insurance, life insurance and microfinance subgroups landed in the red zone, while hotels, others, trading and finance sub-indices witnessed gains.

The microfinance sub-index was the biggest loser in the review week, decreasing by 1.28 per cent or 20.11 points to rest at 1,541.5 points. Samata Microfinance Bittiya Sanstha’s share price fell by Rs 21 to Rs 1,329.

The life insurance sub-index dropped by 1.19 per cent or 71.96 points to land at 5,942.18 points, with Nepal Life Insurance Company’s share price declining by Rs 10 to Rs 1,010. Likewise, the non-life insurance subgroup shed 1.08 per cent or 64.59 points to rest at 5,904.76 points. Share price of Himalayan General Insurance was down by seven rupees to Rs 433.

Similarly, manufacturing sub-index went down by 0.41 per cent or 9.31 points to 2,217.59 points. The hydropower subgroup also descended by 0.16 per cent or 2.43 points to 1,435.43 points, which was due to API Power’s share price dropping by Rs 13 to Rs 270.

Moreover, development banks subgroup was also down by 0.06 per cent or 0.95 point to land at 1,408.31 points. The banking subgroup shed 0.01 per cent or 0.06 point to 1,012.8 points, with share price of Everest Bank down by Rs 10 to Rs 662.

Meanwhile, the hotels sub-index was the top gainer and went up by 1.78 per cent or 32.33 points to 1,846.76 points. The share price of Soaltee Hotel rose by six rupees to Rs 245. Likewise, the others subgroup saw an increment of 0.64 per cent or 4.55 points to 715.04 points.

Similarly, the trading sub-index also expanded by 0.21 per cent or 0.42 point to land at 196.69 points and the finance subgroup inched up by 0.05 per cent or 0.33 point to 609.92 points.

Altogether, 3.94 million shares of 179 companies worth Rs 1.05 billion were traded through 16,886 transactions during the week. The traded amount was 27.41 per cent lower than the total weekly turnover of the previous week, which was recorded at Rs 1.45 billion. In the past week, 4.75 million shares of 186 companies had changed hands through 15,128 transactions.

All the top spots in terms of weekly turnover were occupied by commercial banks in review period, led by Nabil Bank at
Rs 53.03 million. It was followed by Nepal Investment Bank with Rs 38.88 million, Nepal Credit and Commerce Bank with
Rs 32.41 million, Nepal Bank with Rs 30.49 million and Sanima Bank with Rs 27.39 million.

Meanwhile, Mega Bank was the leader in terms of number of shares traded with 137,000 units of its scrips changing hands. In terms of number of transactions, Rairang Hydropower Development Company was at the top with 745 transactions.