Nepal Stock Exchange (Nepse) plunged 25.27 points to close at 1,604.31 points last week as investors stayed away for a number of reasons. These include the increasing interest rate, political situation, budget announcement along with companies issuing their primary shares. 

The secondary market that opened at 1,629.58 points on Sunday, dropped 14 points to close at 1,615.58 points. There was no trading on Monday as the government had announced a public holiday to mark the Constitution Day. On Tuesday, the aftermath of the budget announcement the day before was made clear, with market shedding 21.15 points to close at 1,594.43 points. 

It was the first time in the last two months that the market index went below 1,600 points, which the stockbrokers attributed to the general disappointment felt by investors when the budget was announced. The government failed to come up with programmes to boost the market.

On Wednesday, the market recovered to gain 13.68 points before facing a downswing of 3.8 points on Thursday. On average, the market declined 1.55 percent, observing a similar slump to the previous week.

Binod Rimal, managing director of Nepal Stock House, said the market was affected by weak investor confidence triggered by the postponement of second phase of local election and a surge in banks’ interest rate. “It was further lowered when the government budget failed to declare concrete programmes to develop the country’s capital market, he said, “The market was also affected adversely by investors waiting to invest in primary shares that a number of companies are likely to issue soon.”

Along with the Nepse index, the sensitive index that measures the performance of Group ‘A’ companies also plunged 5.65 points to close at 340.34 points, with majority of the groups in the index dropping points.

Out of the nine trading groups, eight faced losses over the review period. Only Nepse of ‘trading’ remained stable at 212.76 points throughout the week.

Insurance witnessed the largest fall of 143.88 points to close at 8,614.87 points. Rimal attributed the fall mainly to the Securities Board of Nepal’s regulation 

that would allow listed companies to issue further public offerings only after a minimum of five years from the date of issuing primary shares.

The commercial bank saw the second largest fall, dropping 28.71 points to close at 1,429.46 points. Likewise, development bank lost 22.67 points, manufacturing 17.21 points and hydropower 13.17 points. Rounding out the losers were the sub-indices of finance companies, hotels and ‘others’, dropping 8.24 points, 3.26 points and 1.73 points respectively.

Standard Chartered Bank Nepal observed the largest turnover of shares worth Rs179.25 million. According to Rimal, the bank managed the feat as investors looked to book profits from selling the bank’s further public offerings that were listed in the secondary market last week.

Similarly, Siddhartha Bank’s stocks worth Rs153.19 million were transacted. Himalayan General Insurance, Bank of Kathmandu and Prabhu Bank were also among the top five companies with the largest turnover.

Siddhartha Bank also topped in terms of number of transacted shares, with 247,000 units exchanging hands.

With the fall in the market index, the value of shares listed in Nepse fell Rs21.13 billion. This meant that the market capitalisation dropped to Rs1,876.96 billion from Rs1,898.09 billion over the week.

Last week, the shares of 158 listed companies were traded. Despite a fall in the index, the transaction amount inclined 5.81 percent to Rs2.84 billion. The number of traded shares also increased to 5,121,160 units from 4,567,090 units.

Right Shares/Bonus Shares

Company                  Type    Units

Himalayan Bank         Bonus    13,497,435

Soaltee Hotels           Bonus    5,265,524

Civil Laghubitta Bittiya Sanstha    Bonus    50,000

Kailash Bikas Bank        Right     3,160,672