Investors flee from market

- RAJESH KHANAL, Kathmandu

Jun 16, 2019-

Nepal Stock Exchange (NEPSE) plunged 14.96 points to close at 1,269.63 points last week, after banks reported a shortfall of loanable funds which sent investors fleeing.

With a downfall in the index, the average daily turnover also slipped to Rs507.21 million from Rs689.06 million in the previous week.

During the review period, NEPSE conducted transactions for only four days. The secondary market was closed on Sunday to mark the public holiday of Bhoto Jatra.

The market opened at 1,284.59 points on Monday and declined by 8.77 points to close at 1,275.82 points.  

On Tuesday, the market increased marginally by 0.17 points. On Wednesday and Thursday, the market again went down by 3.51 points and 2.85 points respectively.

Eventually, the market index dropped 14.96 percent over the review period.

Stock analysts attributed fall in the market to increased supply of stocks and low demand from investors. “After banks reported a shortfall of loanable funds, investors are reluctant to inject money into the secondary market fearing that the interest rate could shoot up,” said a stockbroker on condition of not disclosing their identity.

The sensitive index that measures the performance of Group A companies also declined 2.04 points to close at 271.85 points.  

With the NEPSE index posting a double digit loss, investors saw Rs17.05 billion being wiped out in the book value of their investment portfolio as the market capitalisation declined to Rs1,579.38 billion from Rs1,596.43 billion.

Except for the sub-indices of trading and development bank, the remaining nine sub-groups landed in the red last week. Of them, non-life insurance lost the largest of 257.82 points and closed at 5,379.2 points.

Life insurance also shed 105.58 points, followed by hotels (28.43 points), hydropower (21.12 points), manufacturing (19.41 points), microfinance (17.6 points) and finance companies (15.34 points). Similarly, the sub-index of ‘others’ declined 10.14 points while commercial banks declined 8.26 points.

Of the gainers, trading and development banks added 19.39 points and 0.9 points respectively.

Regarding the individual companies, Shivam Cements saw Rs145.65 million worth of its shares exchanging hands, the largest of all during the review period. It was followed by NIC Asia Bank, promoters’ shares of Global IME Bank, Nepal Bank Limited and Prabhu Bank.  

Last week, stocks worth Rs2.02 billion were transacted during the four-day trading period. The total number of traded shares stood at 6,664,629 units.

NEPSE listed 8,171,250 units bonus shares of Swabhimaan Laghubitta Bittiya Sanstha, Nepal Community Development Bank and Union Hydropower during the review period.



Right Shares/Bonus Shares

Company    Type    Units

Swabhimaan Laghubitta Bittiya Sanstha    IPO     618,610

Nepal community Development Bank     Bonus    52,640

Union Hydropower Ltd.    IPO    7,500,000

Published: 16-06-2019 10:44

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