Nepal Stock Exchange (NEPSE) plunged 34.88 points to close at 1,284.59 points last week, as the investors showed their lack of confidence in the recently announced government budget to address issues in the secondary market. Investors are now waiting for the Nepal Rastra Bank to come up with stock market-friendly measures via the monetary policy that the central bank is going to announce shortly.

The NEPSE index had gained steam ahead of the budget announcement with investors believing the government fiscal plan would address the underlying problems in the capital market. But the budget failed to shed a light on policies to bolster the country’s secondary market and dented investor confidence.
With a downfall in the index, the average daily turnover also slipped to Rs689.06 million from Rs866.31 million in the previous week.
In a four-day trading week, the secondary market was in the doldrums during the review period. The market opened at 1,319.47 points on Sunday and declined by 13.79 points to close at 1,305.68 points. On Monday, the market again slipped 12.84 points, followed by a downfall of 3.56 points on Tuesday. On Wednesday, the exchange took a breather for the public holiday of Eid, the great festival of Muslims. However, when the market reopened on Thursday, it promptly dropped 4.69 points, completing its downward spiral.
Eventually, the market index dropped 2.64 percent over the review period.
Stock analysts attributed the investors’ low confidence towards the government budget for the nosedive of the stock market. “As the market is dominated by the presence of short-term investors, they are now waiting for the central bank to address the financial sector problems through the monetary policy,” said a stockbroker on condition of not disclosing the identity.
The sensitive index that measures the performance of Group A companies also declined 7.26 points to close at 273.89 points as a result of losses in majority of the sub-indices including that of the commercial banks which hold major shares in market capitalisation.  
With a double digit fall in the NEPSE index, investors lost Rs43.12 billion in the book value of their investment portfolio, as the market capitalisation declined to Rs1,596.43 billion from Rs1,639.55 billion.
Except for finance companies and hotels, indices of the remaining nine sub-groups went down last week. Of them, life insurance lost the largest of 225.29 points and closed at 6,304.38 points.
Non-life insurance also shed 176.81 points, followed by hydropower (53.06 points), microfinance (48.06 points) and commercial banks (33.32 points). Likewise, the indices of ‘others’ declined 19.89 points, manufacturing declined 17.65 points, trading declined 10.31 points and development banks declined 8.91 points.
Of the gainers, hotels and finance companies added 25.27 points and 11.2 points respectively.
Regarding the individual companies, Shivam Cements recorded shares transaction worth Rs353.5 million, the largest of all. It was followed by Prabhu Bank, Premier Insurance, Nepal Bank Limited and NIC Asia Bank.
Last week, stocks worth Rs2.75 billion were traded in the four-day trading week. The total number of traded shares stood at 8,366,255 units. NEPSE listed 775,063 units bonus shares of Forward Community Microfinance Bittiya Sanstha during the review period.


Right Shares/Bonus Shares
Company    Type    Units
Forward Community Microfinance Bittiya Sanstha     Bonus     775,063