Nepse gains 52 points in the first week of new fiscal year

Published On: July 22, 2017 02:15 AM NPT

KATHMANDU, July 21: Nepal Stock Exchange (Nepse) index bounced back this week, gaining 52.18 points to close at 1,635.75 points on Thursday -- the last trading day of the week. 

The benchmark index's gaining streak in the beginning of the new fiscal year reflects positive sentiment of investors.

The stock market, which was on a bearish trend for the last couple of months, rebounded this week amid indications that increased government spending was pumping cash into the banking system. With the banking system observing shortage of lendable fund due to mismatch in loan and deposit growth, bank and financial institutions (BFIs) have tightened their lending toward the stock market. Rise in interest rates in recent months had also pushed the stocks down. 

While the growth in government spending has increased liquidity in the banking system to some extent, bankers say that it is not going to bring down interest rates anytime soon. 
However, investors are bullish with the rise in bank deposit figures in the last month of the 2016/17.

“The stock market rebound can be interpreted as an immediate response of investors who assume that credit will become cheaper now,” Narendra Sijapati, former president of Stock Brokers Association of Nepal (SBAN), told Republica.

Some also said that better-than-average performance of listed companies in the last fiscal year has also driven up the stocks prices. “Listed companies will now start publishing their annual financial results. Investors predict that their profits and performances have been impressive in the last fiscal year, promising a better return to shareholders. This is one of the reasons why the stock prices are climbing in the beginning of the new fiscal year,” Anjan Raj Poudyal, another stock broker, said.

All trading groups ended in the green zone this week. Insurance group was the biggest gainer of the week as its sub-index jumped by a whopping 641.34 points to close at 8,993.11 points. Hotels, and Manufacturing and Processing sub-indices also climbed 81.81 points and 58.59 points, respectively, closing at 2,297.56 points and 2,424.96 points. Banking, the heavyweight trading group in the secondary market, also climbed up 40.87 points to settle at 1,462.09 points. Development Bank group ended 46.17 points higher at 1,991.1 points. Similarly, Hydropower sub-index posted a gain of 33.67 points to close at 1,942.77 points. Finance sub-index also closed 5.37 points higher at 745.92 points. 'Others' group inched up 1.74 points to close at 695.86 points. Trading group remained unchanged at 212.76 points. 

Nepal Life Insurance Company Ltd topped the list of companies in terms of turnover (Rs 283.4 million), while Laxmi Value Fund I was at the top in terms of number of shares traded (718,000 units). Forward Community Microfinance Bittiya Sanstha Ltd was ahead of other listed companies in terms of number of transactions (3,701). 

A total of 8.75 million units of shares of 165 companies worth Rs 4.74 billion were traded in the market this week through 39,437 transactions. The turnover is 12.72 percent higher compared to last week.

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