Microfin, insurance cos fuel Nepse

- Post Report, Kathmandu
Stockbrokers have attributed the growth to the positive political development and investors’attraction towards stocks of microfinance and insurance

Jan 3, 2016-The Nepal Stock Exchange (Nepse) increased 15.91 points to close at 1,151.38 points last week. The secondary market, which opened at 1,135.47 points on Sunday, fell 3.52 points on Monday before gaining 10.22 and 9.21 points over the next two days.  

Stockbrokers have attributed the growth mainly to the positive political development and investors’ attraction towards stocks of microfinance and insurance companies.

Priya Raj Regmi, president of the Nepal Stockbrokers’ Association, said the demand for stocks of microfinance and insurance companies had pushed the index. With the micro-finance companies announcing  dividends from 10-62 percent, investors have been drawn towards their stocks. For example, Nirdhan Utthan Micro-Finance Development Bank has announced a dividend of 62.91 percent, while Nagbeli Micro-Finance Development Bank has declared 55 percent dividend.  

Dharma Raj Sapkota, managing director of Swornalaxmi Securities, however, said that the surge in Nepse was due to an increase in demand for shares with the possibility of easing the trade embargo by India. “The rise in investor confidence has fuelled the market growth. This has pulled up the benchmark along with the demand,” he said.

Indices of six out of the nine trading groups registered growth over the week, with the benchmark of insurance group surging 191.64 points—the biggest of all. It was followed by development banks, commercial banks, hotels, hydropower and finance companies.

 With a drop of 1.18 points, ‘others’ was the only loser last week. The indices of manufacturing and trading groups were stable at 1859.08 points and 207.97 points respectively.The sensitive index, which measures the performance of blue chips companies, also inched up 3.11 points to close at 246.54 points.

Despite rise in the Nepse index, the transaction volume declined 17.83 percent to Rs1.83 billion.

Sapkota pointed out the shortfall in trading days this week as a cause for the low transaction volume. With a public holiday on Wednesday, the secondary market was open only for four days.

However, more shares changed hands over the week, with the number of traded shares hiting 3,474,710 units, up from 3,909,370.Among the individual companies, at Rs141.97 million Nepal Bank shares recorded the highest turnover in terms of the transaction volume.

National Life Insurance, NIC Asia Bank, Garima Bikas Bank (promoters’ shares) and Prime Commercial Bank (promoters’ shares) completed the top five list.

Garima Bikas Bank (promoters’ shares), with a transaction of 523,000 units of shares, was on top in terms of number of traded shares.

SECTORS THAT WENT UP

Sector                                     Points Gained

Insurance Companies        191.64

Development Banks           28.13

Commercial Banks             11.93

Hotels                                    9.57

Hydropower Companies    0.26

Finance Companies           0.17

SECTORS THAT went down

Sector                           Points Lost

Others                                    1.18

Nepal Bank                           141.97

National Life Insurance      119.89

NIC Asia Bank                      111.2

Garima Bikas Bank

(promoters’ shares)            89.51

Prime Commercial Bank

(promoters’ shares)            66.24

Published: 03-01-2016 09:11

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