The market has set a new record, as banking stocks continue to lure investors who expect more stock dividends in the coming fiscal year.The decision of the Nepal Rastra Bank (NRB) to raise the minimum paid-up capital of bank and financial institutions (BFIs) is one of the reasons behind Nepse's bull run in recent months, according to investors.
Investors' attraction toward banking shares was visible on Thursday's trading as well as the sub-index of Banking group, the heavyweight group in the stock market, lifted the benchmark index to a new high. Excess liquidity in the banking system has also encouraged investors to pour their money into the stock market, say analysts.
"There is excess loan-able funds with BFIs which has brought interest rates to all-time low, encouraging investors to put more money into the secondary market," Bhisma Raj Chalise, CEO of Civil Capital Ltd, said. "The stock market has become an investment avenue for many people who think that they can get returns faster than other sectors," he added. "With the improvement in political climate, there is hope among investors that the stock market will go up further and increase their value of assets," said Chalise.
He, however, was quick to point out the risks of market's fall. "Though there are risks about the benchmark index falling, I do not think that it would plunge to such a lowest level like earlier. Also there are mutual funds to stabilize the market," said Chalise.
While Banking, Hotels, Development Bank, Manufacturing and Processing, and Others group ended on the green zone, Hydropower, Finance and Insurance sub-indices registered loss on the day.
A total of 1.34 million units of shares of 131 companies worth Rs 845.44 million changed hands in the market through 3,958 transactions on Thursday.
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