Nepse index still in the doldrums

Kathmandu, August 4

Though both the government and Nepal Rastra Bank (NRB) have introduced some policies that are favourable to the stock market, the country’s sole secondary bourse has yet to pick up pace.

In fact, NRB recently also allowed stockbrokers to extend margin lending and the unaudited financial statements published by a few banks and financial institutions are also positive. Notwithstanding these positive developments, the Nepal Stock Exchange (Nepse) index shed 0.009 per cent or 0.11 point in the trading week between July 29 and August 2.

“I really can’t figure out the actual reason why the stock market has remained stagnant for quite some time. Even the financial reports of banks and financial institutions seem to be positive,” said Uttam Aryal, chairman of Investors Association of Nepal. “I think investor sentiment is at a low because in previous days the finance minister kept harping that share market is an unproductive sector in every gathering he attended,” he opined.

Aryal further stated that though Nepse was established by government, it has not been able to handle it properly. “The insecurity being felt by investors is deep-rooted at the moment and government will have to do something visible and concrete to boost the market.”

The benchmark index, which had opened at 1,191.20 points on Sunday, had gained 3.62 points by the first trading day of the week to close at 1,194.82 points. It decreased by 0.44 point to 1,194.38 points on Monday and by 2.91 points to 1,191.47 points on Tuesday.

However, it rose by 2.40 points to 1,193.87 points on Wednesday but on Thursday it again lost 2.56 points to close the week at 1,191.31 points.

Sensitive index rose by 0.07 per cent or 0.19 points to 251.15 points and float index went up by 0.17 per cent or 0.15 point to 85.56 points.

In the review period, hotels, others, non-life insurance, microfinance, hydropower, finance and manufacturing subgroups landed in red zone whereas banking, development banks and life insurance saw some gains. Trading sub-group saw no transaction in the week.

The hotels sub-index was biggest loser in review period, falling by 2.07 per cent or 38.31 points to 1,808.45 points. This was due to Soaltee Hotel’s share price falling by five rupees to Rs 240. Similarly, others subgroup dropped by 1.04 per cent or 7.46 points to land at 707.58 points with Nepal Telecom’s share price descending by seven rupees to Rs 720.

Non-life insurance sub-index also shed 0.92 per cent or 54.71 points to rest at 5,850.05 points. The share price of Everest Insurance was down by Rs 20 to Rs 1,280.

Meanwhile, microfinance sub-index declined by 0.68 per cent or 10.50 points to 1,531 points. Likewise, hydropower subgroup fell by 0.31 per cent or 4.50 points to 1,430.93 points on the back of Chilime’s share price dropping by four rupees to Rs 743.

Finance subgroup fell by 0.29 per cent or 1.82 points to 608.1 points. Likewise, manufacturing subgroup shed 0.20 per cent or 4.49 points to 2,213.1 points. This was due to share price of Bottlers Nepal (Tarai) declining by Rs 100 to Rs 5,400.

Meanwhile, banking sub-index topped the pack of gainers rising by 0.49 per cent or 5.01 points to 1,017.81 points. Everest Bank’s share price rose by three rupees to Rs 665.

Similarly, the development bank sub-index widened by 0.37 per cent or 5.30 points to 1,413.61 points and the life insurance subgroup inched up by 0.12 per cent or 7.33 points to land at 5,949.51 points.

Altogether, 4.08 million shares of 181 firms worth Rs 1.08 billion were traded through 15,310 transactions in the week. The traded amount was 1.94 per cent higher than the total weekly turnover of previous week, which was recorded at Rs 1.06 billion. In past week, 3.94 million shares of 179 firms had changed hands through 16,886 transactions.

In review period, Machhapuchchhre Bank took the lead in weekly turnover with Rs 68.71 million and also led in terms of trading volume with 335,000 units of its shares changing hands. In terms of number of transactions, Hydroelectricity Investment and Development Co was at top with 731 transactions.

NMB Bank with Rs 58.03 million, Nepal Credit and Commerce Bank with Rs 48.58 million, Neco Insurance (Promoter) with Rs 44.86 million and Sanima Mai Hydropower with Rs 41.94 million rounded up the top five companies in terms of weekly turnover.