Nepal Stock Exchange (Nepse) last week slid 36.29 points to close at 1,178.87 points after banks refused to ease back on soaring interest rates despite the Nepal Rastra Bank offering new provisions on loan against share the previous week.

The market failed to capitalise on the positive momentum from the previous week, resulting in a free fall along with dismal transaction volumes. The average daily turnover also slumped to Rs323.52 million from Rs785.73 million in the previous week.

The secondary market that opened at 1,215.16 points on Sunday slid 10.62 points to close at 1,204.54 points. On Monday, the market declined 17.27 points and ended the day below 1,200 benchmark points. The remaining trading days saw the index dropping 1.42 points, 5.42 points and 1.56 points on Tuesday, Wednesday and Thursday respectively. In overall trading, the market fell by 2.98 percent over the review period. 

Stockbrokers said the central bank’s attempt to adopt lenient policy towards the market failed to attract investors. “Another major reason for the market downturn was the banks’ failure in reducing the interest rate at a time when listed companies are offering low returns on investment,” said a stockbroker under condition of anonymity.

The sensitive index that measures the performance of Group ‘A’ companies also fell by 8.6 points to close at 250.06 points with a notable drop in the sub-indices of almost all of the groups in the trading lists.

Along with the plunge in market index, the average value of shares listed on the stock market also dropped Rs49.28 billion, as the market capitalisation shrunk to Rs1,408.17 billion from Rs1,457.45 billion in the previous week.

Except for the sub-indices of hotels and manufacturing, the remaining trading groups posted red in their indices. Life insurance lost the largest of 255.4 points and closed at 6,052.24 points. With a fall of 112.58 points, non-life insurance also went down to 5,683.57 points. 

Of the losers, ‘others’ witnessed a fall of 49.33 points, followed by commercial banks with 32.35 points, development banks with 29.75 points, hydropower with 19.25 points and microfinance with 18.57 points. Likewise, indices of finance companies and trading also declined 3.8 points and 0.17 points respectively.  

Of the gainers, the sub-indices of hotels and manufacturing inched up 9.06 points and 0.25 points respectively during the review period.   

Of the individual companies, Nepal Life Insurance recorded Rs101.64 million worth of its shares being traded on the market, the largest during the review period. It was followed by Nepal Bank Limited, National Life Insurance, Nepal Credit and Commerce Bank and Chhimek Laghubitta Bikas Bank. 

Last week, stocks worth Rs1.61 billion were transacted, nearly 60 percent less compared to the previous week. The total number of traded shares also plunged to 4,654,130 units from 11,137,088 units. 

Nepse listed 1,860,000 units of primary shares of Chautari Laghubitta Bittiya Sansthan during the review period.