Money

Nepse scales new peak of 1877.93 pts

- Post Report, Kathmandu

Jul 31, 2016-

The Nepal Stock Exchange (Nepse) soared to an all-time high of 1877.93 points last week as the financial sector witnessed a massive share trading of shares.

Shares of commercial banks, insurance companies, and development banks traded as hotcakes as the market posted the highest ever single-day transaction of Rs2.75 billion on Tuesday. The market rose to 1881.45 points before closing at 1877.45 on Thursday, the last trading day.

Among the top five companies with the highest turnover, four were commercial banks. Siddhartha Bank saw transaction of its shares worth Rs565.39 million as an alleged leak of information about the company’s upcoming dividend distribution plans prompted investors to splurge on its shares.

Stockbrokers, however, said the bank’s shares were traded after a halt as it recently underwent a merger adding up its financial strength. Moreover, the investors were attracted towards its shares because of low price compared to other commercial banks, said the brokers. Machhapuchhre Bank, Nepal Bank and Nepal Bangladesh Bank followed as they posted a turnover of Rs548.77 million, Rs405.89 million and Rs330.45 million, respectively.

The overall market transaction volume shot up by 49.64 percent to Rs9.3 billion. Analysts and brokers attributed to the rise to the increased investor confidence after the reduced broker commission rate came into effect and the trading hours were increased to four. “The investors’ trading expenses reduced after the new provision of reduced broker commission came into effect, boosting investors’ morale,” said Rabindra Bhattarai, a stock market analyst.

He said investors’ inclination towards financial sector shares was because of good financial performance of the sector in the last fiscal year. Despite facing the impact of prolonged Indian embargo, Nepal’s banking sector has been posting good profits. Out of the nine trading groups, six posted gains. The insurance sector (up 377.87) led the gainers side while the others and hydropower sectors dropped 38.17 and 17.23 points, respectively.

“Two major factors—better financial reports and lowered broker commission—lifted investors’ confidence,” said Suchita Khanal, managing director of Sweta Securities. “Moreover, the increase in trading hours also contributed to the rise.” According to Khanal, the transaction volume might surge further in the coming days as talks about increasing the number of system-logins for brokers from the current two to three have surfaced. This will enable more transactions at the same time.

TOP FIVE COMPANIES IN TERMS OF TURNOVER

Company                                       Turnover (in Rs. millions)

Siddhartha Bank                          565.39

Machhapuchre Bank                  548.77

Nepal Bank                                  405.89

Hydroelectricity Invest&Dev      331.26

Nepal Bangladesh Bank          330.45

SECTORS THAT WENT UP

Sector                                       Points Gained

Commercial Banks                        70.56

Development Bank                        28.53 

Finance                                           12.54

Hotel                                                12.74

Insurance                                       377.87

Manufacturing and Production  206.77 

SECTORS THAT WENT DOWN

Sector                                  Points Gained

Hydropower                            17.23

Others                                     38.17

Published: 31-07-2016 09:02

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