June 26, 2016 02:40 AM NPT
KATHMANDU, June 25:Nepal Stock Exchange (Nepse) index jumped 44.02 points this week to close at yet another high of 1,666.29 points on Thursday--the last trading day of the week.
While investors are still enjoying lucrative stock dividend from bank and financial institutions, speculations that insurance companies will also have to raise paid-up capital soon is lifting up market to new highs, according to market analysts.
Many also say ease in trading due to introduction of dematerialized form of stock trading and low yields from bank deposits is attracting investors toward the secondary market. “Earlier all the trading used to be done through paper-based manual process which was time consuming. Now, one can sell or buy shares in a short period.
As the trading process is completed in four days, it gives more liquidity in the market," Bijay Ranabhat, executive director of Bhrikuti Stock Brokering Company Pvt Ltd, told Republica. "The market rise is not a magic; it is driven by the automated trading process."
Lack of other attractive investment opportunity is also driving people to the secondary market. "People have money, but they do not have any investment avenues. So they are turning toward stock market. With more people coming to buy stocks, price of securities is going up," he added.
He also attributed the growing activeness of market regulator toward the development of stock market as the other reason behind rise in benchmark index. "The regulator has come forward with many modernization plans like automation of the market and expanding trading to other parts of the country. This has boosted confidence of investors, encouraging them to invest more,” added Ranabhat.
Sub-indices of most of the trading groups ended on the green zone this week. Insurance sub-index posted the highest growth of 319 points to close at 9,509 points. Hydropower group came second, as its sub-index climbed up 186.49 points to settle at 2,715.32 points. Banking, the heavyweight trading group in the secondary market, also ended 42.96 points higher at 1,497.69 points.
Manufacturing and Processing, and Hotels sub-indices also went up 34.34 points and 36.64 points, respectively, to end the week at 2,430.44 points and 2020.3 points. Development Bank sub-index also went up 20.4 points to close at 1,657.91 points. Finance group also logged gains of 3.44 points and closed at 747.68 points.
'Others' group, however, shed 1.17 points to end the week at 791.83 points.
A total of 11.9 million units of shares of 147 companies worth Rs 7.82 billion were traded in the market this week through 32,018 transactions.