NRB policy to increase upper threshold on margin loans could not boost investors’ confidence

KATHMANDU, Oct 14: Nepal Stock Exchange (Nepse) lost 82.32 points last week despite Nepal Rastra Bank (NRB) revising the threshold of Rs 120 million on the loans against shares.

The Nepse opened at 1,956.92 points on Sunday and closed at 1,874.60 points on Thursday. During the review period, the market plunged to as low as 1,870.26 points and as high as 1,963.80 points, witnessing a volatility of 93.54 points.

The market started the week with a double-digit fall of 35.67 points on Sunday. The NRB’s attempt to boost investors’ confidence by increasing the upper limit of the margin loans up to Rs 200 million, failed to work.

On Monday and Tuesday, the index further declined by 12.58 points and 19.06 points, respectively. On Wednesday, the market index inched up 5.16 points followed by a plunge of 20.16 points on Thursday to close for the week.

Along with a fall in the market index, the total turnover amount also declined to Rs 7.043 billion from Rs 7.063 billion in the previous week. The average daily turnover amount also fell to Rs 1.408 billion from Rs 1.412 billion during the review period.

All the 13 trading groups had their market values declined. Index of non-life insurance group came down 598.59 points, whereas life insurance (547.91 points), hotels and tourism (314.43 points), development bank (163.59 points), hydropower (122.74 points) and microfinance (122.53 points) were registered as the biggest losers of three-digit marks.  

Among the individual companies, Sanima GIC Insurance Limited had its shares worth Rs 268.08 million transacted and stood top on the list. Himalayan Laghubitta Bittiya Sanstha Limited shed 19.71 percent of its share price and was the topmost loser. Sayapatri Hydropower Limited, with an addition to its market price by 28.05 percent, was the biggest gainer. 

The market capitalization declined 3.75 percent in the review week. The total worth of scrip declined to Rs2.872 trillion from Rs 2.983 trillion, making investors face a huge loss of Rs 111 billion in their investme nt portfolio, which was more than double of the losses that the investors had sustained in the previous week.

 
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