KATHMANDU, March 18: Nepal Stock Exchange (Nepse) benchmark index recovered 4.27 points this week to close at 1,288.36 points. Though the stocks have been falling rapidly in the last few days, there was relatively a less volatility in the market this week.
Analysts say the expectation that the new government would come up with a white paper to revive the economy has helped the stocks to recover a little bit. Though the government officials say that they are planning to issue the white paper, the date has not been finalized yet.
The stocks, which were already on a downward trend since last year amid rising interest rates, fell further after the formation of the new government under KP Sharma Oli. The appointment of former governor of Nepal Rastra Bank (NRB) Yubaraj Khatiwada as the finance minister was met with frosty reception by stock investors who are afraid that he will try to regulate the flow of funds toward the stock market.
His remarks at an interview in the first week of March, where he indirectly reiterated his stance that the share market was an unproductive sector, was interpreted by investors as a signal to tighten the stock market. Asked about the current liquidity problem, he had said that the government can bring capital from international market to address the liquidity problem while adding that there was no point of mobilizing the capital if the fund again goes back to the real estate, share market and auto sectors.
The stock market, after reaching a record high in 2016 following the decision of the NRB to raise the minimum paid-up capital requirement for bank and financial institutions by multiple times, has been on a downward trend ever since with some occasional rises. The rise in interest rates of BFIs since last year has been driving stocks down. The decision of two main communist parties to form 'left-alliance' in the parliamentary and provincial elections and agreement to unify the party has also made investors nervous.
The appointment of former NRB governor Khatiwada has been the latest reason that has made the investors nervous, sending stocks prices downward.
Hotels group was the highest gainer of the week as its sub-index jumped 75.56 points and closed at 1,920.25 points. This was followed by Insurance group whose sub-index climbed 21.6 points to settle at 6,246.76 points. Hydropower group registered a gain of 19.22 points and ended at 1,566.69 points. Sub-indices of 'Others' and Development Bank groups also went up 8.63 points and 6.95 points, respectively, settling at 712.77 points and 1,507.05 points. Banking, the heavyweight group, also ended 2.53 points higher at 1,143.15 points. Manufacturing and processing group, however, dived 44.43 points to end at 2,226.73 points. Microfinance group also fell 12.53 points to close at 1,468.75 points. Finance group went down 0.9 point and settled at 666.79 points. Trading group remained unchanged at 208.43 points.
Nepal Life Insurance Company Ltd topped the list of companies in terms of turnover (Rs 82.06 million) and number of transactions (869). Janata Bank Lt stood at the top in terms of number of traded shares (167,000 units).
A total of 3.34 million units of shares of 174 companies worth Rs 1.29 billion were traded in the market this week through 17,287 transactions. The turnover is 27.92 percent less than the last week.
Bonus shares of Global IME Laghubitta Bittiya Santha Ltd, Laxmi Laghubitta Bittiya Sanstha Ltd, Excel Development Bank Ltd, Barun Hydropower Company Ltd and Guheswori Merchant Banking and Finance Ltd were listed in Nepse this week for the trading. Similarly, bonus shares of Swarojgar Laghubitta Bikas Bank Ltd, Chilime Hydropower Company Ltd, Kailash Bikas Bank Ltd, Prudential Insurance Company Ltd and Mount Makalu Development Bank Ltd were also listed in Nepse for trading.