High interest rates drags Nepse down

- Post Report, Kathmandu

Jul 29, 2018-

Nepal Stock Exchange (Nepse) declined marginally by 2.19 points to close at 1,191.2 points last week, as investors were stung by the high interest rate charged by banks.

The average daily turnover amount stood at Rs211.25 million over the period, a fall from Rs291.02 million in the previous week.    

The market that opened at 1,193.39 points on Sunday lost 11.73 points to close at 1,181.66 points. On Monday and Tuesday, the market index however added up 12.84 points and 4.77 points respectively. The market again fell by 4.92 points and 3.15 points respectively on Wednesday and Thursday.

Consequently, the market closed with a slump of 0.18 percent in the overall trading days.

Stockbrokers attributed the fall in Nepse to low confidence among investors, triggered by the high interest rate charged by the banks. “Investors complained that they were still compelled to pay as high as 15 percent interest rate despite the banks’ assurance to lower the rate following an ease in liquidity position with them in recent days,” said a stockbroker under condition of anonymity.

The sensitive index that measures the performance of Group ‘A’ companies also went down marginally by 0.46 points to close at 250.96 points with the majority of blue chip companies including commercial banks observing fall in their shares prices.

Along with a fall in the market index, the average value of shares listed on the stock market also declined Rs2.54 billion, as the market capitalisation fell to Rs1,410.14 billion from Rs1,412.68 billion during the review period.

Five out of the 11 trading groups posted losses last week. The biggest loser was microfinance, shedding 20.11 points to close at 1,541.5 points followed by manufacturing with a loss of 9.31 points.

Hydropower, development banks and commercial banks made up the rest of the losers, plunging by 2.43 points, 0.95 points and 0.06 points respectively.

Of the gainers, hotels added up 38.54 points in their index, followed by ‘others’ (4.55 points), trading (0.42 points) and finance companies (0.33 points). Recently, Nepse split the insurance group into life and non-life categories, which closed at 5,942.18 points and 5,904.76 points respectively.

Of the individual companies, Nabil Bank Limited led in terms of transaction amount. The company witnessed a turnover of its shares worth Rs53.03 million. Similarly, Nepal Investment Bank with a turnover of Rs38.88 million finished in second position, followed by Nepal Credit and Commerce Bank, Nepal Bank Limited and Sanima Bank.

Mega Bank Nepal Limited observed the largest transaction volume in terms of number of shares. A total of 137,000 shares of the bank were traded during the review period.

Last week, stocks of 179 listed companies were traded. With a fall in market index, the transaction amount also went down 27.41 percent to Rs1.05 billion. The traded number of shares also declined to 3,945,760 units from 4,754,520 units.

Published: 29-07-2018 08:43

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