New stocks worth Rs110.24 billion were listed on the Nepal Stock Exchange (Nepse) during the first 10 months of the fiscal year, with the government issuing a large number of bonds and banks and financial institutions (BFIs) offering rights and bonus shares to meet the capital requirement set by Nepal Rastra Bank (NRB). 

Shares in public companies totalled more than Rs47 billion, NRB’s current macroeconomic statistics showed. 

Bonus shares worth Rs27.12 billion, rights shares worth Rs16.64 billion and ordinary shares worth Rs3.23 billion were issued during the period. 

Likewise, mutual funds worth Rs1.25 billion also helped boost the size of the country’s  secondary market. Following the listing of new stocks, the paid-up capital of the listed companies grew by 44.3 points and reached Rs275.66 billion as of mid-May this year. Anjan Raj Poudel, managing director of Thrive Brokerage House, attributed the increased volume of listed stocks to BFIs issuing rights shares and bonus shares to raise their paid-up capital in line with the central bank’s guideline. 

“In addition, a significant rise in the number of new hydropower and microfinance companies increased the volume of listed shares,” Poudel said. During the period, government bonds worth Rs62 billion were also listed on the Nepse. However, the bonds have not been traded on the stock exchange so far.  

“Compared to shares, government bonds have a low rate of return, and they attract only investors looking at a long-term investment,” said Poudel, adding that mainly institutional investors bought them. During the review period, market capitalisation surged 20.5 percent to Rs1,925.65 billion, equivalent to 74.1 percent of the country’s gross domestic product. 

BFIs and insurance companies accounted for 86 percent of the total market capitalisation. 

New govt sends stocks falling

The Nepse index lost 24.7 points to close at 1,590.49 points on Sunday. The secondary market has been in a bearish mood for the last few days following the formation of the new government. The insurance index was the highest loser shedding 138.33 points while commercial banks lost 25.43 points.