KATHMANDU, Feb 16: Nepal Stock Exchange (Nepse) index bounced back by 3.28 percent, or 41.83 points, to close at 1,316.8 points on Wednesday.
The benchmark index, which was in a freefall until Sunday, started going up from Monday as investors are trying to cash in on the falling stock prices in the bearish market, analysts say.
While bank and financial institutions (BFIs) are yet to see their lendable funds grow, many small investors and those, who do not rely on bank financing, are buying shares whose value has gone down in recent weeks, say stock brokers. “There was expectation that the market would get stable at some point when investors feel that it is the time to buy stocks,” Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), said. “Lately, there has been presence of buyers which can be reflected in the daily turnover which is rising steadily,” he added.
Last week, the Nepse index plunged 68.27 points to close at 1,296.23 points as investors, panicked with the margin calls from BFIs, scrambled to offload their shares.
A margin call forces investors to either liquidate their position in the stock or add more cash to the account.
The slump continued on the first trading day of the week as the benchmark index shed 43.73 points. However, the market rebounded the next trading day posting a gain of 27 points.
Except Manufacturing and Processing group, all trading groups ended in the green zone on Wednesday. Insurance group climbed up 385.46 points to close at 5,519.59 points.
The Hydropower sub-index followed suit as its sub-index jumped 66.06 points to close at 1,558.95 points. Banking, the heavyweight group in the secondary market, also jumped 37.11 points to close at 1,266.21 points. The sub-indices of Hotels and Development Bank also went up 49.01 points and 43.27 points to close at 1,711.65 points and 1,407.4 points, respectively. Finance and 'Others' group also ended 12.68 points and 2.89 points higher at 604.15 points and 691.52 points, respectively. Manufacturing and Processing group went down by 5.66 points to close at 2,151.55 points.
A total of 1.61 million units of shares of 141 companies worth Rs 520.29 million were traded in the market on the day through 5,076 transactions.
Meanwhile, Asian Life Insurance Company Ltd has announced 20 percent stock dividend and 1.05 percent cash dividend (for tax purpose) to its shareholders. According to a disclosure made to the Nepse by the life insurer, the decision, however, is subject to the approval of Beema Samiti and the company's upcoming Annual General Meeting.
Similarly, the life insurance company has decided to propose 2:1 rights issue (after distribution of bonus shares) to its shareholders, subject to the approval from the concerned authorities, according to the company's announcement.