Elections fail to impress stock investors

Published On: November 4, 2017 09:56 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 4: Though the elections in the past used to elate investors, the stock market has, however, taken a downward course in recent days even when the election fever has gripped the country.

The stock market which was on a bearish trend after the interest rates started to climb, has taken further dive and has not been able to recover yet. Against predictions that the stocks will start to rally after the country heads for election, the stock market has gone down further. 

The benchmark index fell 17.42 points last week to close at 1,522.81 points on Thursday -- the last trading day of the week.

Analysts attribute ultra-high interest rates of bank and financial institutions and the alliance of communist parties in the eve of elections to the market slump. 

According to analysts, the electoral alliance of CPN-UML and the CPN (Maoist-Center) for the elections has weakened the confidence of investors who still fear that the economy may suffer if the 'left coalition' gains majority.    

“It seems that the left alliance is likely to take lead in the election, which is a cause for worry for the investors because the communist parties still do not have a positive attitude toward the stock market,” Guru Manandhar, a stock investor, told Republica. Similarly, another factor that has driven stocks down is the shortage of lendable funds in the banking sector which has sent interest rates up. 

“The financing and loans have not become easy for  the investors yet. The interest rates have not come down,” said Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN). 

Most of the trading groups have ended in the red zone this week. Insurance group suffered the highest loss of 66.91 to close at 8,392.73 points.  Development Bank followed the suit as its sub-index dived 40.75 points to end at 1,825.27 points. Hotels group lost 29.67 points to finish at 2,310.91 points. Banking, the heavyweight group, shed 16.75 points and closed at 1,301.31 points. Sub-indices of Finance and 'Others' groups also went down 5.32 points and 4.34 points, respectively, to settle at 774.99 points and 829.17 points. Manufacturing and processing group, however, registered a gain of 11.9 points to close at 2,447.43 points. Hydropower group also ended 9.58 points higher at 1,826.96 points. Trading group inched up 0.68 point to close at 226.61 points. 

A total of 6.27 million units of shares of 181 companies worth Rs 2.24 billion were traded in the market this week through 22,882 transactions. 

Rights shares of Machhapuchchhre Bank Ltd and Gorkha Finance Ltd, and bonus shares of Gurans Life Insurance Company Ltd were traded in Nepse this week.

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