Nepal Stock Exchange (Nepse) fell 7.05 points to close at 1,653.53 points last week, with banks reluctant to reduce interest rate for loan against shares.

 

The secondary market that opened at 1,660.58 points on Sunday gained 4.47 points to close at 1,665.05 points. On Monday, the market inclined 2.89 points to close at 1,667.94 points. After the public holiday on Tuesday, the market plunged 6.22 points and 8.19 points on Wednesday and Thursday respectively. As a result, the overall market index slid marginally by 0.42 percent. 

 

Ram Krishna Tiwari, managing director of Oxford Securities, attributed the fall in Nepse index to the banks’ reluctance on reducing interest rate for loan against shares for their regular clients in particular. “While banks have reduced interest rate marginally for new borrowers, interest rate is still at a high level for those who had taken loan previously. It has affected the volume of investment in the secondary market,” Tiwari said.  

 

The sensitive index that measures the performance of Group ‘A’ companies also declined 1.19 points to close at 347.03 points with a fall in index of commercial banks along with majority of trading groups. With a fall in the market index, the average value of the shares listed on the stock market also went down Rs4.41 billion, with market capitalisation reaching Rs1,939.44. 

 

Of nine trading groups, five posted loss in their indices. Insurance lost the most, dropping 54.92 points to close at 9,397.48 points. Tiwari remarked the fall in insurance stocks as market correction. “The insurance group has been witnessing a wide range of fluctuation in its index for the last few weeks,” he said. Hydropower lost 41.98 points to close at 1,917.23 points. 

 

It was followed by development banks (24.1 points), hotels (17.65 points) and commercial banks (5.82 points). 

 

Of the three gainers, ‘others’ added 14.46 points to its index. Similarly, finance companies and manufacturing gained 4.38 points and 1.45 points respectively. The index of trading was stable at 214.11 points throughout the week. 

 

Of the individual companies with the largest transaction amount, Citizen Investment Trust led the segment. The company witnessed Rs195.31 million worth of its shares being transacted. Tiwari said the combination of the 21 percent bonus shares plus the end of fiscal year for the company had attracted the high volume of transaction amount.

 

Nepal Life Insurance took second spot, with a transaction amount worth Rs159.32 million. Rounding up the top five companies with largest turnover in the secondary market were Standard Chartered Bank, National Hydropower Company and Prime Commercial Bank.

 

Likewise, Siddhartha Investment Growth Scheme 1 led in the number of transactions, with 3,127,000 units exchanging hands. 

 

Last week, shares of 168 listed companies were traded. Along with a fall in Nepse, the transaction amount also plunged 27.30 percent to Rs3.81 billion. The traded number of shares however surged to Rs12,103,580 units from 10,580,490 units.