NEPSE soars 26.75 points after unaudited report shows banks recording strong profits

- RAJESH KHANAL, Kathmandu

May 19, 2019-

Nepal Stock Exchange last week surged by 26.75 points to close at 1,318.71 points as investors rushed to buy shares of commercial banks after an unaudited report showed that majority of commercial banks posted strong profits. Investors are speculating that these financial institutions will offer dividends based on their profits.

Along with the market index, the average daily turnover soared to Rs989.86 million over the last week, up from Rs693.62 million in the previous week.

The secondary market opened at 1,291.96 points on Sunday, gained 3.07 points to close at 1,295.03 points. The market successively went up by 6.31 points, 14.11 points and 5.55 points on Monday, Tuesday and Wednesday respectively.

However, on Thursday, the market lost 2.29 points. Eventually, the market inclined by 2.07 percent over the review period.

Stock analysts attributed the notable rise in the NEPSE index to the investors’ attraction towards stocks of commercial banks in particular. According to the unaudited report published by the banks, almost all 28 commercial banks posted good financial results with significant increase in their profit earnings in the first nine months of the fiscal year. “With investors speculating that banks will offer good amounts of dividends out of their profits, demand for the banks’ stock soared,” said a stockbroker on request of not disclosing the identity.

The sensitive index that measures the performance of blue chip companies also rose by 4.92 points to close at 281.44 points with a double-digit growth in the stock prices of majority of trading groups including commercial banks that hold major shares in market capitalisation. With a rise in share prices, investors gained Rs33.2 billion from the transaction, as the market capitalisation inclined to Rs1,636.79 billion from Rs1,603.59 billion. Last week saw all but one trading group pick up points, with life-insurance the only loser. Manufacturing added the largest of 283.31 points to close at 2,662.45 points.

Non-life insurance was second on the list, gaining 185.01 points. Hotels gained 91.7 points, development banks gained 62.92 points and hydropower gained 28.46 points.

The indices of ‘others’ increased 22.31 points, commercial banks increased 16.01 points, financial companies increased 7.46 points, trading increased 4.9 points and microfinance increased 1.34 points.

Life-insurance was the odd one out, losing 10.26 points.

Regarding the individual companies’ trading amount, Shivam Cements topped the list after recording stock transactions worth Rs531.11 million. It was followed by Nepal Bank Limited, Nepal Credit and Commerce Bank, Agriculture Development Bank and Prime Commercial Bank.

Last week, stocks worth Rs4.94 billion were traded which was 42.7 percent more than the amount in the previous week. The total number of traded shares also surged to 15,263,749 units from 12,401,838 units.

NEPSE listed 19,268,141 units of ordinary shares of six companies over the review period.

Published: 19-05-2019 08:38

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