KATHMANDU, July 17:Nepal Stock Exchange (Nepse) benchmark index climbed up 20.58 points, 1.3 percent, on Monday amid rise on the government spending at the end of the fiscal year. The stock market recovered by double digit on the second trading days following a long slump amid shortage of lendable fund and rise in interest rates.
According to analysts, the rise in the deposits of bank and financial institutions (BFIs) after the government expenditure rose at a staggering level on the last month of the fiscal year has boosted the confidence of investors.
“News reports about rise in the deposits of banks that were facing acute shortage of lendable fund become a reason for the investors to become upbeat about the prospect of stocks recovery,” said Narendra Sijapati, former president of Stock Brokers Association of Nepal (SBAN).
“Also, the government has transferred a huge amount of money at local units which is also expected to make the liquidity position of banks more comfortable. The market rebounded on the second trading day which is an early response to the assumption of investors that there could be correction on interest rates with rise on expenses and budget transfer could pump money into banking system,” added Sijapati, who is also the managing director of Kalika Securities Company Ltd.
All trading groups ended on the green zone with Insurance group going up highest. Its sub-index rose 95.35 points to close at 8,447.12 points. Development Bank also ended 29.57 points higher at 1,974.5 points. Sub-indices of Manufacturing and processing and Hotels groups also went up 27.04 points and 26.39 points to settle at 2,393.41 points and 2,242.14 points. Banking, the heavyweight group, registered the gain of 21.83 points to finish at 1,443.05 points. Hydropower, Finance and Others group went up 9.18 points, 5.23 points and 1.16 points, respectively, closing at 1,918.28 points, 745.78 points and 695.28 points.
Anjan Raj Poudyal, another former president of SBAN, said that the stocks recovery could be the year-end effect. “I do not see any changes in any fundamental for the market to go up unexpectedly. Probably, this could be the year-end impact as listed companies start publishing their annual reports, giving an indication of how much dividend they could offer,” he added.
A total of 2.01 million units of shares of 154 companies worth Rs 694.37 million were traded in the market on Monday through 6,635 transactions.
Shareholders of Himalayan Distillery Ltd, National Microfinance Bittiya Sanstha and Forward Community Microfinance Bittiya Sanstha, among other companies, were the highest gainers of the day while Kuber Merchant Finance Ltd, Kabeli Bikas Bank Ltd and Dibyashwori Hydropower Ltd, among other 25 companies, suffered losses on the day.