Nepse pulls out of dive; up 4.13pts

- POST REPORT, Kathmandu
Nepse pulls out of dive; up 4.13pts

May 28, 2015-

The Nepal Stock Exchange (Nepse) pulled out of its weeklong dive registering a 4.13-point gain to close at 841.96 points on Thursday in a sign that the secondary market had recovered from the trauma of the April 25 earthquake.

Along with the rise in the overall index, the turnover swelled to Rs179.6 million. In the days before the earthquake, the average daily transaction in the secondary market used to be between Rs150-200 million.

Capital market expert Rabindra Bhattarai said the secondary market was slowly heading towards normalcy. “The number of shares traded and the turnover have returned to almost pre-quake levels,” he said. The last day of trading for the week saw 419,000 shares changing hands. On April 23, the last trading day before the earthquake, 447,000 shares were traded resulting in a turnover of Rs170 million. Market capitalisation, however, fell Rs100 billion over the week.

Stockbrokers said they expected the market to rise further in the coming days. Anjan Raj Paudel, past president of the Nepal Stockbrokers’ Association, said it was normal for the market to plunge in the initial days following the catastrophe. “The volume of transactions remained stable even when the Nepse was on a slide during the week and the selling pressure faced by shares of commercial banks and hydropower companies has eased in recent days which are positive signs for the secondary market,” he added.

Shares of non-life insurers, microfinance and hotels group were among the top losers in the aftermath of the earthquake. “As investors are sceptical about the financial position of these companies, there is less demand for their stocks.”   

However, Niraj Giri, spokesperson of the Securities Board of Nepal (Sebon), had a different opinion. “The market trend cannot be judged just on the basis of one week’s transactions,” said Giri, adding that wild fluctuations in the short term were not a normal phenomenon. According to him, the regulator has been keeping a close eye on the stock market at present.

The Nepse plunged more than 100 points on the first four days after reopening. The Nepse was closed for a month following the earthquake. The office building of CDS and Clearing was damaged by the tremor making it untenantable. Meanwhile, 34 listed companies have submitted detailed reports of the damage caused to their office buildings by the earthquake to Nepse.

The offices of three companies were severely damaged while 12 companies said their offices were partially damaged. Two branch offices of Infrastructure Development Bank, one in Liping, Sindhupalchok and the other in Charikot, Dolakha, were reported to have been badly damaged.

Published: 29-05-2015 07:51

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