Nepse rebounds 40 points as investors await new monetary policy

Published On: July 8, 2017 12:50 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 8: Nepal Stock Exchange (Nepse) index rebounded 40.29 points this week to close at 1,582.11 points on Thursday-the last trading day of the week. 

The stock market returned to winning ways this week after a long slump amid credit crunch in the banking system, rising interest rates and rise in the supply of shares following listing of bonus and rights shares of listed companies, particularly bank and financial institutions and insurance companies. 

The preparation to impose 13 percent value added tax (VAT) on brokerage commission had sent the bearish market further down amid worries that additional tax burden will further increase transaction cost.  

However, the stocks started to rise from the first trading day of the week as Nepal Rastra Bank (NRB) prepares to bring monetary policy for the new Fiscal Year 2017/18. 

“The market is losing value steadily for the past few weeks. However, investors seemed to be hopeful that the central bank would introduce some measures to address the current credit crunch which has been the major factor for the current slump,” Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), told Republica.

Many investors also find the bear run in the market as an opportune moment to get hold of shares at cheaper prices which led to the market rally, according to analysts. 
Except Manufacturing and Processing group, all trading groups posted gain this week.

Insurance group's sub-index jumped highest by 329.31 points to close the week at 8,396.27 points. The sub-index of Development Bank also went up 56.2 points to close at 1,953.73 points. Banking, the heavyweight trading group in the secondary market, ended 38.52 points higher at 1,412.59 points. The sub-indices of Hotels and Hydropower groups also rose 30.8 points and 18.49 points, respectively, to close at 1,939.95 points. Finance and Others groups also ended in the green zone this week, as their sub-indices went up 2.53 points and 1.44 points, respectively, to end trading at 742.92 points and 691.23 points. Trading group remained unchanged at 212.76 points.

Manufacturing and Processing group, however, shed 2.03 points to close at 2,356.69 points.  

A total of 7.02 million units of shares of 162 companies worth Rs 2.64 billion were traded in the market this week through 27,032 transactions. 

Nepal Life Insurance Company Ltd topped the list of companies this week in terms of turnover (Rs 211.52 million), while NIBL Samriddhi Fund I was at the top in terms of number of shares traded (1.12 million units). Nepal Life Insurance Company Ltd led the league table of companies in terms of number of transactions (3,769). 

Rights shares of Mahakali Bikas Bank Ltd, Laxmi Bank Ltd and NIC Asia Bank Ltd and ordinary shares of Chhyangdi Hydropower Ltd were listed for trading this week. 

Nepse to implement fully-automated online trading
Nepse officials have said that the preparations are afoot to enforce fully automated online stock trading system from November 7. Organizing a press meet in Kathmandu on Friday, Nepse General Manager Sita Ram Thapaliya said that the stock exchange company was hopeful of getting the new system from the developer within the first quarter of the upcoming fiscal year for trial before bringing it into implementation from November 7. 

Once the fully automated online trading system is implemented, replacing the current semi-automated trading system, investors will be able to place trading orders from their homes without having to come to their brokerage offices, according to Nepse officials. 

Currently, share trading is based on Intranet system under which brokerage firms connected with the Nepse trading platform requires investors to come to brokerage firms to place their orders. 

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