Nepse index falls by 10.56 points

  • Capital gains tax hike downs Nepal’s only secondary market
- Post Report, Kathmandu

Jun 3, 2018-

Nepal Stock Exchange (Nepse) index plunged 10.56 points to close at 1,307.66 points last week, after the government raised the capital gains tax on stock transactions during the budget announcement.

The market that opened at 1,318.22 points on Sunday declined 17.81 points to close at 1,300.41 points. Nepse also opened bids for consultants to test the automated trading system. This impacted the following day’s trade, as the secondary market surged by 35.98 points to close at 1,336.39 points.

However, the market fell by 9.18 points, 4.94 points and 14.61 points on Tuesday, Wednesday and Thursday respectively. Consequently, the market closed with a downfall of 0.80 percent in the overall trading days.

Stockbrokers attributed the fall in Nepse to the government’s announcement to raise capital gains tax for individual transactions. “In a major setback, investors were discouraged with the government’s decision to raise capital gains tax to 7.5 percent from the existing five percent,” said a stockbroker under condition of anonymity.

The sensitive index that measures the performance of Group ‘A’ companies also went down 2.61 points to close at 275.28 points with fall in Nepse of majority of trading groups, including commercial banks.

Along with a fall in the market index, the average value of the shares listed on the stock market also downsized by Rs4.6 billion, as the market capitalisation reached to Rs1,542.52 billion from Rs1,547.12 billion over the week.

Out of the ten trading groups, half of them enjoyed a rise in their indices while the other half were in the red. Of the losers, index of hydropower companies plunged 20.1 points, the largest fall, to close at 1,609.64 points. Index of commercial bank fell 18.14 points, manufacturing 7.58 points, ‘others’ 2.25 points and that of hotels fell by marginal of 0.82 points.

Similarly, insurance was the largest gainer, adding 51.13 points. The group’s index closed at 6,839.03 points. Finance companies gained 4.14 points, microfinance added 2.47 points, trading picked up 1.6 points and development banks inched up by 1.2 points.

Of the individual companies, Nepal Bank Limited led in terms of transaction amount. The bank’s shares worth Rs75.49 million were traded last week.

Likewise, shares of Global IME Bank worth Rs72.74 million were traded over the review period. It was followed by Sana Kisan Bikas Bank, Premier Insurance Company and Prabhu Insurance Limited.

Similarly, Citizens Bank International led in terms of the number of traded shares. There was a turnover of 337,000 units of the bank’s shares.

Last week, stocks of 183 listed companies were traded. Despite a fall in the market index, the

transaction amount increased 8.56 percent to Rs2.08 billion. The traded number of shares also increased to 4,744,810 units from 4,137,430 units.  

Right Shares/Bonus Shares

Company    Type    Units

Civil Bank Limited    Right    20,740,886.75

Everest Insurance Company    Bonus    121,500

NLG Insurance Company    Bonus    1,280,812

Nepal Life Insurance Company    Bonus    13,005,000.23

Sana Kisan Bikas Laghubitta Bittiya Sanstha    Bonus    1,257,655.859

Published: 03-06-2018 08:26

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