Benchmark index closes at 1,193 points amid strong market sentiments
Analysts urge new and small investors to exercise caution
Daily Commentary: Nepse triggers positive circuit breaker for a...
KATHMANDU, Aug 19: Nepal Stock Exchange (Nepse) benchmark index has climbed to a record high amid a bull run in the market for the past few trading days. The benchmark index of the only stock market jumped 31.99 points on Wednesday to close at 1,192.92 points--the highest in Nepse's 22-year history. With the recent decision of Nepal Rastra Bank (NRB) to increase the minimum paid-up capital requirement for the bank and financial institutions (BFIs), the stock market has taken a bullish trend.
Nepse benchmark index has already registered a gain of 228.65 points, or 24 percent, since the NRB unveiled its monetary policy for the fiscal year 2015/16 on July 23 that requires BFIs to raise their paid-up capital within two years. As per the announcement, commercial banks will have to raise their paid-up capital by four fold to Rs 8 billion. Likewse development banks and finance companies will also need to increase their paid-up capital multiple times within two years.
The announcement by the NRB on Tuesday instructing the BFIs to distribute only bonus shares instead of cash dividend to meet the newly set minimum paid-up capital further lifted the stock market Wednesday.
Similarly, analysts also attribute the buyoant sentiment among the investors to the recent political developments that suggest the new constitution is increasingly becoming certain. "Recent political developments indicate that the constitution will be promulgated soon. It has encouraged investors to put more money into stocks," said Priya Raj Regmi, president of SBAN.
