Nepse down 13.28 pts on NRB directive

- POST REPORT, Kathmandu
Nepse down 13.28 pts on NRB directive

Aug 30, 2014-

Nepal Stock Exchange (Nepse) last week plunged 13.28 points to close at 972.17 points, thanks to the central bank’s cap on banks and financial institutions’ (BFIs) investment in shares.

The market that opened at 985.45 points on Sunday saw a sharp fall of 37.61 points and 25.98 points on Monday and Tuesday, respectively, after the Nepal Rastra Bank’s (NRB) directive. The market, however, made some recovery after the NRB clarified the directive was intended to reduce the “held for trading securities”.

“Held for trading” is the purchase of shares and other securities just to sell them in a short period to make profits.

The central bank also clarified BFIs could invest up to 30 percent of their core capital under other two headings -- Available for Sale and Held to Maturity. Following the NRB clarification on Tuesday, the market rose 38.57 and 11.74 points on Wednesday and Thursday, respectively.

The market, which had been following a bear trend for the last month due to stockbrokers inability to clear transaction timely, was further caught into a downward spiral after the NRB directive on Aug 20.

Bishnu Sapkota, managing director of Neev Securities, said the central bank’s “changing” policies hit investor sentiments. “It has affected small investors who rush for profit booking fearing the NRB could introduce new circulars that might affect the market adversely,” he said.

Of the nine trading groups, five posted gains. The gainers’ side was led by the group representing hydropower companies (up 192.54 points).

It was followed by insurance companies, hotels, finance companies and development banks. The commercial banks’ group (down 34.48 points) was last week’s biggest loser. It was followed by manufacturing and others. Trading group remained stable at 188.42 points.

The sensitive index, which measures the performance of A class companies, declined 2.65 points to close at 208.64 points.

Despite the fall in the benchmark index, the market transaction rose 16.14 percent to Rs 2.52 billion over the period. The number of traded shares also increased to 5,173,910 from 3,980,510.

Chilime Hydropower Company posted the highest individual turnover (Rs 318.8 million). Everest Bank, Kumari Bank, Siddhartha Bank and NCC Bank rounded out the top five. Nabil Balance Fund topped in terms of the number of shares traded (1,032,000 units). Meanwhile, the Nepse listed both right and bonus shares of Kaveli Bikas Bank and Shikhar Insurance.

TOP FIVE COMPANIES IN TERMS OF TURNOVER

Company    Turnover (in Rs millions)

Chilime Hydropower Co    318.8

Everest Bank    191.55

Kumari Bank     155.95

Siddhartha Bank    89.98

NCC Bank    84.56

SECTORS THAT WENT up

Hydropower Companies     192.54

Insurance C ompanies    16.14

Hotels    12.52

Finance Companies    3.35

Development Banks    2.8

SECTORS THAT WENT down

Sector    Points Gained

Commercial Banks    34.48

Manufacturing    10.44

Others    1.18

Published: 31-08-2014 09:43

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