Nepal Stock Exchange (Nepse) plunged 25.48 points to close at 1,554.55 points last week, as the low rate of returns offered by listed companies in the index put off investors. 

 

A public holiday on Sunday to celebrate Eid meant that the secondary market opened on Monday at 1,580.03 points. But there was little to cheer as the index shed 25.47 points to close at 1,554.56 points. Tuesday trading was closed due to the public holiday of Indra Jatra. Trading resumed on Wednesday with the market gaining 11.94 points to close at 1,566.5 points. The final day of trading on Thursday saw the market dropping another 11.95 points, completing a roller-coaster week at Nepse.

 

The three day trading week saw the overall market index fall by 1.61 percent.

Narendra Raj Sijapati, managing director of Kalika Securities attributed the fall in Nepse index to an increased supply of stocks at the secondary market, bringing down stock prices. “Despite a fall in interest rate in loan against shares and the banks increasing amount of loan for such loanes, the low rate of returns offered by most of the listed companies put off investors’ attraction in the market.”

 

The sensitive index that measures the performance of Group ‘A’ companies also declined 5.31 points to close at 326.01 points with a fall in index of commercial banks along with majority of other trading groups. 

 

With a fall in the market index, the average value of the shares listed in stock market also went down Rs59.6 billion, with market capitalisation reaching to Rs1,803.93 billion from Rs1,863.53 billion over the week. 

 

Of the nine trading groups, seven posted loss in their indices. Insurance lost 196.34 points, the largest of all, to close at 8,658.4 points. 

 

Manufacturing was the second largest loser on the list, with the group losing 90.61 points to close at 2,574.39 points. It was followed by hydropower (40.43 points), 

commercial banks (23.17 points), development bank (20.98 points), finance companies (8.26 points) and hotels (2.37 points). 

 

‘Others’ was the only gainer over the review period. The group added up 0.29 points in its index to close at 716.1 points. Trading was stable at 214.11 points throughout the week. 

 

Of the individual companies with the largest transaction amount, Nepal Investment Bank led the segment. The company observed total share transactions worth Rs123.12 million. 

 

Sijapati said investors were attracted to shares of Nepal Investment Bank following the bank’s announcement to provide 25 percent bonus shares and 15 percent cash dividend. The information provided by the bank to Nepse was later on, found to be falsely written as the bank got the numbers mixed up. The bank was supposed to provide 15 percent bonus shares and 25 percent cash dividend instead. Following the case, Securities Board of Nepal even halted transaction of the bank’s shares. 

 

Nabil Bank, was in second position as it recorded stock transaction worth Rs104.65 million. Likewise, Nirdhan Utthan Bank, Nepal Life Insurance and promoters’ shares of Nepal Investment Bank were also among the top five companies with largest turnover at the secondary market. 

 

Likewise, promoters’ shares of Gurans Life Insurance, topped in terms of number of transactions, as 175,000 units of shares changed hands.

 

Last week, the shares of 171 listed companies were traded. Along with a fall in Nepse, the transaction amount also plunged 32.24 percent to Rs2.41 billion. The traded number of shares declined to 4,499,810 units from 7,584,590 units.  

 

Company Type Units

Kalika Microcredit Development Bank    Bonus 325,000

Sahayogi Bikas Bank Right 1,101,135

Purnima Bikas Bank Right 814,051