The market, which had remained closed on April 23 (Thursday), had not opened as per the schedule on April 26 due to the earthquake and subsequent aftershocks which claimed more than 8,000 lives and damaged hundreds of thousands of homes and buildings.
Though Nepse had decided to resume trading from May 17, it was forced to postpone trading for May 24 again after another tremor rocked the country on May 12 which further damaged the building of its subsidiary company Central Depository System and Clearing Ltd.Amid fears and speculations that the tragedy would also take a toll on the stock market, investors showed patience on the first trading day, according to the stock market observers.
"It seems that many investors were prepared and expecting for the worst performance of the benchmark index. A drop of 28 points is obvious in this scenario. This is not a drastic decline," Praveen Raman Parajuli, president of Merchant Bankers Association, told Republica. "While this is a tragic situation for the country which will have a bit of reflection in the stock market, I do not see the situation to worry about," Parajuli, who is also the CEO of Nabil Investment Banking Ltd, said.
Though the market was on a steep fall from the very first minute of the beginning of trading, such decline moderated after 1 pm. "There was immense selling pressure over the first one hour. However, it slowed in the next two trading hours," Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), told Republica. "Against the speculations and fears that there will be no trading at all despite resumption of the market, most of the investors were not seen much panicked." He also said there was some optimism despite anxiety among investors.
According to stock market analysts, the selling pressure was relatively less in companies that have not suffered much from the earthquake. "There was some buying order and less selling pressure from investors for shares of the companies like Nepal Telecom Ltd which is less likely to bear the brunt of the quake," Poudyal, who is the promoter of Thrive Brokerage Ltd, said.
A total of 593,078 units of shares of 35 companies worth Rs 115.37 million were traded on the day through 35 transactions. However, the total turnover also includes the bulk trading of shares of Narayani National Finance Company Ltd, Prabhu Bank Ltd and Nepal Life Insurance Company Ltd which was worth around Rs 100 million.
"The price of blue chip companies will fall this week to a certain level. After that, institutional investors as well as other individual investors will start purchasing their shares. This will again create a momentum in the market, probably from the next week," Poudyal said.
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