Nepal Stock Exchange (Nepse) index plunged 20.49 points to close at 1,391.03 points last week, as investors held off on investing due to the fast falling stock prices along with the delay in the formation of the new government. With the index shedding points, the daily transaction volume also came down to as low as Rs242.09 million. 

The market that opened at 1,411.52 points on Sunday dropped 1.01 points to close at 1,410.51 points. On Monday, the market shed 10.46 points to close at 1,400.05 points. The market continued on its downward spiral on Tuesday, dropping 6.02 points which saw it close at 1,394.03 points—below the 1,400 marker.

Wednesday proved to be another bleak day in the secondary market, as the index dropped another 12.01 points to close at an 11-month low of 1,382.02 points. However, the market gained 9.01 points on Thursday to offer some respite. Overall, the Nepse index dropped 1.45 percent over the week. 

Stockbrokers attributed the fall in Nepse index to the reluctance of large investors in purchasing stocks. “The investors are in wait and watch mode regarding the formation of new government and are reluctant to invest due to the rapid downfall being observed in market index since last few weeks,” said a stockbroker, under condition of anonymity. 

The sensitive index that measures the performance of Group ‘A’ companies also declined 4.12 points to close at 294 points with all of the trading groups posting losses. 

With a decline in the market index, the average value of the shares listed on the stock market also went down Rs23.31 billion, with the market capitalisation reaching to Rs1,626.74 billion from Rs1,650.05 billion over the week. 

All ten trading groups witnessed downturn in their indices. Insurance shed the largest amount, dropping 161.08 points to close at 7,066.46 points. 

Hotels’ index fell 52.39 points, followed by hydropower (51.95 points), microfinance (36.82 points) and manufacturing (33.25 points). Likewise, the indices  of commercial banks plunged by 15.03 points, development bank by 11.77 points, finance companies by 8.53 points, ‘others’ by 4.18 points and trading by 3.63 points. 

Of the individual companies, Nepal Bank Limited led in terms of the transaction amount and the number of shares. The company witnessed a total transaction of Rs164.71 million from turnover of its 461,000 shares. Stockbrokers attributed the largest turnover of Nepal Bank to the company’s plan to issue further public offerings.

According to Nepse, the bank is issuing 17,684,858 units of primary shares at the premium price. “Furthermore, the bank earned net profit of Rs1.63 billion in the first six months of the current fiscal year, which attracted investors to purchase stocks of the bank,” the source said. 

Likewise, Sanima Mai Hydropower which observed shares transaction worth Rs84.79 million was in second position, followed by the Nabil Bank, Kumari Bank and Nepal Life Insurance in terms of the transaction volume. 

Last week, the stocks of 172 listed companies were traded. Along with the fall in market index, the transaction amount also dipped 13.31 percent to Rs1.55 billion. According to Nepse, the traded number of shares however went up to 4,196,490 units from 3,473,020 units.