Nepal Stock Exchange (Nepse) index nosedived 48 points to close at 1,472.15 points last week as the specter of political deadlock along with possibility of banks raising interest rates negatively affected investors’ sentiment.

 

The secondary market observed a downward trend throughout the review period. The market that opened at 1,520.15 points on Sunday shed 11.01 points to close at 1,509.14 points. On Monday, the market dropped 0.89 points to close at 1,508.25 points. The downward spiral continued on the remaining days, as the market index shed 14.49 points, 9.29 points and 12.32 points respectively. This resulted in the market index falling by 3.15 percent over the week. 

 

Stockbrokers attributed the fall in Nepse index to lack of consensus among the political parties on formation of new government and the election of the National Assembly. “In addition, the possibility of a rise in interest rate due to the fall in liquidity with the banks has also made investors reluctant to invest in the stock market,” said a stockbroker under condition of anonymity. 

 

The sensitive index that measures the performance of Group ‘A’ companies also went down 10.71 points to close at 309.94 points with a significant fall in the indices of  majority of the trading groups. 

 

With a fall in the market index, the average value of  shares listed on the stock market also declined Rs55.58 billion, with the market capitalisation reaching Rs1,711.98 billion from Rs1,767.56 billion over the week. 

 

Of the ten trading groups, nine witnessed downward movement in their indices except for manufacturing. 

 

Insurance lost the largest of 294.4 points to close at 7,600.44 points. Hydropower shed 66.77 points in its index and was the second largest loser. Development banks also went down by 64.35 points. The remaining losers consisted of microfinance (63.4 points), ‘others’ (53.21 points), commercial banks (35.78 points), hotels (29.58 points), finance companies (11.16 points) and trading (6.25 points). 

 

Manufacturing managed to avoid losses and picked up 18.52 points to be the only gainer last week.

 

Of the individual companies, Nepal Doorsanchar Company which observed transactions worth Rs205.03 million led the segment. “As the state owned enterprise is likely to give good amount of cash bonus this year, investors were attracted to purchase shares of the company,” the source explained the attraction of the firm with investors. 

 

Standard Chartered Bank finished in second place transactions worth Rs151.13 million. It was followed by Nepal Grameen Bikas Bank, Prime Commercial Bank and Everest Bank. 

 

Likewise, Nepal Grameen Bikas Bank, saw 359,000 unit shares exchanging hands and topped in terms of number of traded shares. 

 

Last week, stocks of 177 listed companies were traded. With a fall in market index, the transaction amount also dropped 11.92 percent to Rs2.57 billion. The traded number of shares also fell to 5,711,080 units from 5,795,730 units.