Nepal Stock Exchange (Nepse) index dropped 62.08 points to close at 1,460.73 points, as investors were put off by the uncertainty caused by the upcoming provincial and parliamentary election, high bank interest rate and the failure by Nepse to launch their full-fledged online system on time.

 

The secondary market that opened at 1,522.81 points on Sunday plunged 26.35 points and went below the 1,500 mark, to close at 1,496.46 points. On Monday, the market slid 3.04 points to close at 1,493.42 points.

 

The market continued its freefall, dropping points on Tuesday (8.97), Wednesday (17.83) and another 5.89 points on Thursday. As a result, the overall market index fell 4.07 percent over the week. 

 

Nawaraj Subedi, managing director of Trishul Securities and Investment, attributed the fall in Nepse index mainly to the investors’ low confidence with the uncertainty triggered by the result of upcoming election. “In addition to this, high interest rate 

being charged by the banks in margin lending and Nepse failing to keep up with its promise to start online trading system on November 7 have also hit investors’ sentiments.” 

 

The sensitive index that measures the performance of Group ‘A’ companies also declined 12.85 points to close at 306.79 points with a fall in index of commercial banks along with almost all the other trading groups. 

 

With a fall in the market index, the average value of the shares listed in stock market also went down Rs72.06 billion with market capitalisation reaching Rs1,695.79 billion from Rs1,767.85 billion over the week. 

 

All nine trading groups witnessed a loss in their indices. Insurance lost 418.22 points, the largest of all, to close at 7,974.51 points. “The drop just symbolises the market correction in group’s index which had been overpriced,” Subedi said. “Some of the insurance companies’ earnings per share stands only at Rs15-20, while their trading price has crossed Rs1,000.” Hotels were the second largest loser on the lists, with the group losing 135.89 points to close at 2,175.02 points. Development banks shed 82.63 points, followed by commercial banks (55.05 points), manufacturing (48.1 points), hydropower (45.91 points), finance companies (20.2 points), ‘others’ (19.38 points) and trading (4.48 points).  

 

Of the individual companies with the largest transaction amount, stocks of Standard Chartered Bank led the segment by posting a turnover of Rs115.6 million. Subedi said investors were expecting the company to come up with good amount of dividend. “That’s why the investors could have been attracted to purchase the bank’s shares in particular,” Subedi added. 

 

Nepal Life Insurance, saw transaction of its stocks worth Rs93.76 million and ended up in second position. Likewise, Nepal Investment Bank, Everest Bank and Nepal Doorsanchar Company were also among the top five companies with largest turnover at the secondary market.

 

Likewise, Prabhu Bank, which saw 177,000 unit shares exchanging hands, topped in terms of number of transaction. 

 

Last week, the shares of 179 listed companies were traded. Despite the dramatic fall in Nepse, the transaction amount increased 12.47 percent to Rs2.52 billion. However, the traded number of shares went down to 6,059,540 units from 6,266,450 units.  

 

Company Type Units

Century Commercial Bank Right 17,024,381 

Everest Bank Right 15,088,087

Reliable Microfinance Bittiya Sanstha Right 282,500

Hamro Bikas Bank Right 80,770.76

Mission Development Bank Bonus 428,835