Nepse jumps on monetary policy

- POST REPORT, Kathmandu
Nepse jumps on monetary policy

Jul 25, 2015-

Nepal Stock Exchange (Nepse) last week jumped by a notable 40.11 points to close at 1,003.38 points on Thursday.

This is the first time in almost 11 months the market crossed the 1,000-point mark. The benchmark index had last reached the feat on August 18, 2014 when it hit 1,013.62 points.

The market had opened at 963.27 points on Wednesday.

The surge has been attributed to the Nepal Rastra Bank’s (NRB) move to hike the paid-up capital requirement for banks and financial institutions (BFIs). In the Monetary Policy 2015-16, the central bank has asked commercial banks to raise their paid-up capital to Rs8 billion from Rs2 billion in the next two years.

National-level development banks have been told to increase their capital to Rs2.50 billion from Rs640 million, while national-level finance companies will have to raise their capital to Rs800 million from Rs200 million.

Stockbrokers said investors’ expectations that the BFIs would issue right’s or bonus shares to raise their capital pushed the market up. “The demand for shares of commercial banks such as Standard Chartered Bank and Everest Bank was particularly higher,” said Anjan Raj Paudel, managing director of Thrive Brokerage House. He, however, said the high demand might not be sustainable in the long-run as the need for raising such a huge amount of capital could hit the banks’ profit, affecting dividend.

The sub-index of insurance companies rose 71.12 points, while commercial banks jumped 57.28 points and development banks were up 25.89 points. The trading group remained stable at 202.88 points.

The sensitive index that measures the performance of A class companies increased 9.34 points to close at 214.24 points.

Despite the jump in the index, the turnover amount, however, plunged 29.54 percent to Rs932.3 million. The number of shares traded also declined to 1,920,420 units from 3,492,150.

National Life Insurance posted the highest individual turnover of Rs57.56 million. It was followed by Nepal Life Insurance, Everest Bank, Citizens Bank International and Nepal Bangla-desh Bank. Nabil Balance Fund 1 topped in terms of the number of shares traded (200,000 units).

TOP FIVE COMPANIES IN TERMS OF TURNOVER

Company    Turnover (in Rs millions)

National Life Insurance    57.56

Nepal Life Insurance     52.68

Everest Bank    48.05

Citizens Bank International     41.64

Nepal Bangladesh Bank    41.49

SECTORS THAT WENT went up

Sector    Points Gained

Insurance Companies    71.12

Commercial Banks    57.28

Development Banks    25.89

Hotels    12.39

Manufacturing    6.52

Hydropower Companies     6.01

Finance Companies    6.01

Others    5.87

Published: 26-07-2015 08:28

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