Nepal Stock Exchange (Nepse) index last week inclined 17.16 points to close at a 1,165.94 points after the government stepped in to address the ‘interest rate war’ and other underlying problems in the country’s only stock exchange market.

The task force formed by the government, on Wednesday, submitted a 58 point recommendation report that recommended reducing the interest rate and improving the stock exchange market. A day after the report came out, Nepal Rastra Bank called on the chief executives of commercial banks and asked them to reduce the interest rate. 

Along with the rise in Nepse, the average daily turnover rose to Rs443.06 million from Rs327.52 million in the previous week. 

The secondary market that opened at 1,148.78 points on Sunday gained 18.82 points to close at 1,167.6 points. On Monday too, the Nepse added 15.17 points in its index before going down 14.62 points and 5.47 points on Tuesday and Wednesday, respectively. On Thursday, the market bounced back, gaining 3.26 points.  

Consequently, the market closed by gaining 1.49 percent in overall trading days during the review period.

Stockbrokers said the market surged mainly due to the government initiative to control the rising interest rates that banks were offering. “The government stepped in to take necessary measures to improve the market. This coincides with a group of investors that had started a hunger strike to pressure the government to do just that,” said a stockbroker under condition of anonymity.

The sensitive index that measures the performance of Group ‘A’ companies also inclined by 3.36 points to close at 248.06 points with a rise in the sub-indices of almost all groups in the trading list.

Along with the soaring market index, the average value of the shares listed on the stock market also increased Rs23.24 billion, as the market capitalisation stood at Rs1,393.59 billion, up from Rs1,370.35 billion in the previous week.

Of the 11 trading groups, eight posted green in their indices. Life insurance gained the largest of 262.34 points and closed at 5,407.47 points. It was followed by non-life insurance (239.77 points), microfinance (54.06 points), manufacturing (26.41 points), development banks (25.75 points), ‘others’ (8.99 points), commercial banks (6.11 points) and hydropower with an addition of 2.98 points. Of the three losers, hotels shed 8.93 points while trading and finance companies lost 3.38 points and 3.01 points respectively during the review period.   

Of the individual companies, Nepal Bank Limited observed Rs187.49 million worth of shares exchanging hands, the most during the review period. It was followed by NMB Bank, Chhimek Laghubitta Bikas Bank, Nepal Investment Bank and Nepal Credit and Commerce Bank. 

Last week, stocks worth Rs2.21 billion were transacted, which was 35.5 percent more compared to the transaction amount in the previous week. The total number of traded shares also increased to 6,655,512 units from 5,136,924 units.