Nepse plunges 23 points as uncertainty clouds local election
April 29, 2017 12:30 AM NPT
KATHMANDU, April 29: Nepal Stock Exchange (Nepse) index dived 23.1 points this week to close at 1,670.62 points on Thursday -- the last trading day of the week.
While the market did not observe the volatility like in the last week, stocks continued to take a dive this week as uncertainty over the local level polls continue to weigh on investors. Political developments, particularly on local level polls, have been guiding the stock market's course in recent days, according to investors.
Interest rate of bank and financial institutions (BFIs) has been continuously rising in recent months due to shortage of lendable fund which also contributed in market correction. Going against the expectation that BFIs will lower their rates and ease credit flow toward stock market after the government increases its development expenditure, failure to boost capital spending significantly even by the end of third quarter has dashed the hope of investors.
Though investors seemed to be upbeat over the prospect of local level polls with the government and the Madhes-based parties reaching an agreement over constitution amendment and local level polls, protest over the agreement by the main opposition party CPN-UML has cast doubt on implementation of the agreement.
According to analysts, stocks are taking a dip as investors are not convinced about the election prospect. Even the rosy financial statements of some bank and financial institutions for the third quarter despite shortage in lendable fund have failed to encourage investors.
Hotels group was the highest gainer of the week as its sub-index jumped up by 49.1 points to close at 2,243.92 points. The Insurance sub-index also climbed up 43.86 points to settle at 9,050.86 points. Development Bank and Finance groups also ended 9.52 points and 8.96 points higher at 1,978.98 points and 785.16 points, respectively. Trading group also went up 2.1 points to close at 211.35 points.
However, Banking, the heavyweight trading group in the secondary market, shed 41.28 points to end the week at 1,525.96 points. Shares of banking group fell despite some banks reporting good financial results for the third quarter of the current fiscal year. Manufacturing and Processing group also logged loss of 29.5 points to close at 2,167.37 points. Hydropower sub-index also went down by 6.93 points to settle at 2,009.49 points. 'Others' group also registered loss of 12.43 points to end the week at 675.04 points.
A total of 8.2 million units of shares of 156 companies worth Rs 5.69 billion changed hands this week through 41,898 transactions.