The Nepal Stock Exchange (Nepse) index, which opened at 542.44 points on Sunday morning, shed 3.18 points, or 0.59 percent, over the week to close at 539.26 points on Thursday -- the last trading day of the week.[break]
“Politics played a key role in causing the benchmark index to fall this week,” Stockbroker Anjan Poudel told Republica, referring to divergent views expressed by political parties over formation of a chief justice-led government to hold polls.
Two weeks ago, when four major political parties reached consensus on forming an interim political mechanism led by sitting chief justice to hold fresh Constituent Assembly elections, the market response was overwhelming, with the benchmark index surging to 555.93 points - the highest since 22 November, 2009.
Since that time, the index has been fluctuating, with the market lacking the robustness seen during the period when political situation appeared to be improving.
“If the political situation improves, there are high chances of investors returning back to the stock market,” Poudel said.
Over the week, most of the sub-indices that play a crucial role in pushing up the benchmark index, like banking and hydropower, and share price of Nepal Telecom fell.
Banking sub-index, for instance, fell to 536.74 points by Thursday from 539.77 points recorded on Sunday morning. Likewise, hydropower sub-index also shed 15.48 points over the week to close at 1049.23 points on Thursday, while insurance sub-index, which was posting hikes in the recent weeks, also closed at 863.56 points for the week - down from 876.21 points on Sunday morning.
“Lately, investors are gradually losing interest in the market because of the arrival of the lean season as well,” Poudel said. “As of now most of the listed companies have already conducted annual general meetings and distributed dividends. In such circumstances, market tends to remain passive unless there are activities to rejuvenate investor confidence. And positive political development can play the role of catalyst.”
Despite waning investor sentiment, the share trading on the stock market went up by 15.59 percent over the week to Rs 672.69 million, which shows the bourse was liquid this week compared to the previous week.
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