Many attribute the benchmark index's recent winning run to the decision of Nepal Rastra Bank (NRB) to raise minimum paid-up capital of bank and financial institutions, liquidity surplus in the banking system and recent market reforms measures initiated by Securities Board of Nepal (Sebon).However, Nepse started losing value from the second trading day of the week as a reaction to a Sebon statement that advised investors to make investment 'cautiously'. In its statement issued on Monday, Sebon said that it has become 'sensitive' with the stock market's continuous rise despite downward revision of economic growth rate to 2 percent for the current fiscal year and not-so-much satisfactory performance of the listed companies in the wake of recent devastating earthquakes and Tarai-Madhes agitation.
Stock market analysts say that investors have reacted to Sebon's statement. "The market went down slightly this week. This is the impact of the Sebon statement which urged investors to become cautious. It seems that the statement has worked to some extent," Narendra Sijapati, former president of Stock Brokers Association of Nepal (SBAN), told Republica.
Stock brokers say that the correction seen in the stock market is also due to profit-booking mentality of investors. "The market has been rising continuously for the past few weeks. Many investors might have felt that they should cash in on the rise in their share values now. Such mentality has created selling pressure this week," added Sijapati.
Such selling pressure was seen mainly in shares of Banking and Hydropower groups, according to brokers. The Hydropower sub-index plunged 264.17 points to close at 2,323.74 points. Banking, the heavyweight trading group in the secondary market, followed suit, losing 22.08 points to settle at 1,247.6 points. Hotels and Others group also fell 0.68 point and 1.56 points, respectively, to close at 1,791.39 points and 817.67 points.
Insurance group, however, gained 25.69 points to close at 6,073.06 points. The sub-indices of Manufacturing and Processing, and Development Bank also ended the week on the green zone, as their sub-indices went up 16.45 points and 10.02 points, respectively, to close the week at 2,024.73 points and 1,354.31 points. Finance group also ended 3.33 points higher at 687.59 points.
A total of 6.81 million units of shares of 145 companies worth Rs 3.88 billion were traded in the market this week through 17,544 transactions.
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