The Nepal Stock Exchange (Nepse) plunged 55.81 points to close at 1,544.68 points last week, as investors diverted towards alternative sectors like property business triggered by low confidence in the stock market.

The secondary market, which opened at 1,600.49 points on Sunday, fell 29.54 points to close at 1,570.95 points. On Monday, the market shed 26.35 points and closed at 1,544.6 points.  The market, however, gained 9.91 points on Tuesday before slipping 0.61 points and 9.22 points respectively on Wednesday and Thursday. The capital market plunged 3.48 percent in overall trading during last week.   “At the time of volatility in stock market that has appeared for the last few weeks, mainly the small investors rushed to sell shares to book profit,” said Meghnath Upadhyaya, managing director of Primo Securities. He suspected that many investors mighat have invested on

realty business instead on the secondary market in the recent days. 

Upadhyaya also attributed a rise in interest rate on loans against shares and declaration of dividends by most of the listed companies for the falling stock prices.

Along with the Nepse index, the sensitive index that measures the performance of Group ‘A’ companies also dipped 12.01 points to close at 334.43 points. With the commercial banks losing 55.31 points in their sub-index, the sensitive index observed the fall. The fall in the Nepse index has led to a decline in the average value of shares on the stock market by Rs61.84 billion, with the market capitalisation reaching to Rs1,718.95 billion.

Of the nine trading groups, indices of six took a downturn last week. Insurance sub-index witnessed a three-digit loss of 336.7 points to close at 7,365.63 points. Upadhyaya said the small volume of shares of the group traded on the market led to the heavy fall in the insurance sub-index.  The hydropower was the second biggest loser on the list, with the sub-index declining by 78.92 points to close at 1,927.98 points. Similarly, the indices of development banks fell 62.94 points, commercial banks 55.31 points and finance companies 24.76 points, while ‘others’ was among the smallest loser with a downfall of 17.93 points.

Of the two gainers, the index of hotels surged 20.08 points to close at 1,941.66 points. The index of the trading group remained stable at 203.91 points throughout the trading days.

Last week, Shikhar Insurance observed the biggest turnover worth Rs354.47 million. The insurance company’s announcement to provided 60 percent bonus shares to its shareholders was the main draw among the investors, Upadhyaya said.   With a transaction of shares worth Rs325.24 million, Siddhartha Bank was in the second position, followed by Everest Bank, Mega Bank and Bank of Kathmandu Lumbini.

Right Shares/Bonus Shares

Company    Type    Units

National Microfinance Bittiya Sanstha    General    1,000,000

RSDC Laghubitta Bittiya Sanstha    General    1,000,000

First Microfinance Development Bank     Bonus    345,000

Malika Bikas Bank    Bonus    706,835

Siddhartha Finance     Bonus    355,950

Ridi Hydropower Development Company    Right    1,155,000