Investors' confidence falls to record low

KATHMANDU, Aug 28: The Nepal Stock Exchange (Nepse) index (-2.10 percent) plunged once again as it shed 9.31 points to close at 432.74 points on Thursday. This month the secondary market witnessed a dramatic and unprecedented decline in share prices of major companies reflecting low investor confidence.



Compared to previous week, the market turnover was 46 percent lower attributed to the market being closed on Tuesday and Wednesday. [break]



The Commercial Banking sector (-3.25 percent), for the second consecutive week, posted the highest loss amongst all the sub-indices as key banks like Nabil Bank (-Rs 149), Global Bank (-Rs 15), Kumari Bank (-Rs 26), and Standard Chartered Bank (-Rs 135) slid.



Similarly, the Development Banking sector (-1.91 percent) tumbled as both Gandaki Development Bank (-Rs.192) and Infrastructure Development Bank (-Rs.92) are experiencing price re-adjustment post book closure.



The Insurance Sector (-1.64 percent) followed, as the share prices of Prime Life Insurance (-Rs 13) and Asian Life Insurance Company (-Rs 13) declined. The ´Others´ sub-sector (-1.08 percent) also continued its downtrend as share value of Nepal Telecom (-Rs 5) declined.



Despite Sagarmatha Merchant Banking & Finance (+Rs 16) and Prabhu Finance (+Rs 19) ending amongst the top gainers, the Finance sector (-0.69 percent) ended in red as share prices of Crystal Finance (-Rs 33) and Lord Buddha Financial Institution (-Rs 15) plummeted.



Nevertheless, the Hydropower sector (+1.52 percent) defied the market trend as Arun Valley Hydropower (+Rs 20), National Hydro Power (+Rs 1), and Butwal Power Company (+Rs 11) gained value.



Amongst news and highlights, Manakamana Development Bank shares have been listed at the Nepse. They will start trading from the coming week with the ticker symbol MKDBL.



Securities Board of Nepal (SEBON) has issued merchant banking licenses to NMB Capital, Ace Capital and Vibor Capital. Furthermore, for the second time SEBON has extended the deadline for Banks and Financial Institutions to hand over merchant banking licenses to subsidiary companies till mid-October.



On the declaration front, the BOD of Laxmi Bank has announced 13 percent cash dividend. Similarly, Shree Investment & Finance has declared 15 percent bonus shares and 8.16 percent cash dividend.



Forecast



Technical analysis indicators signal the continuation of the current downtrend. Downward retracement, however, can be expected as the market seems to be in an oversell position.

Related story

Take measures to boost confidence of investors