KATHMANDU, Dec 31: Nepal Stock Exchange (Nepse) benchmark index nosedived 52.9 points this week to close at 1,414.78 points on Thursday, the last trading day of the week.
The stock market's trading floor remained open only for four days this week as Nepse remained closed on Monday for Christmas holiday.
Stocks freefall continued this week amid rapid rise of interest rates of bank and financial institutions due to shortage of lendable fund.
If compared to the last year when stocks had climbed to a peak, stocks remained depressed in 2017. Rising interest rates due to shortage of lendable fund in the banking industry largely guided the direction of the stock market.
Though investors seemed to be bullish at the start of the year sending stocks upward from mid-March to April end, there was correction in the market in the rest of the months.
As investors felt pressure of margin call due to fall in the stock price coupled with tightening of lending due to 'credit crunch', many opted either to sell their stocks or postponed decision to buy new shares.
Many investors, mostly those with little appetite for market risks, deposited their cash in banks that offered up to 13 percent interest rates, an investment they found more profitable than the secondary market.
Another factor that weakened investors' confidence was the decision of CPN-UML and CPN (Maoist Center) to band together for parliamentary and provincial polls and announcement of eventually unifying the parties. Branded as the 'left alliance', the marriage of the major communist parties and their resounding victory made stock investors nervous.
Except 'Trading' groups, all sub-indices ended in the red zone this week. Insurance group fell the highest by 279.2 points to close at 7,296.13 points. Development Bank fell 74.07 points and ended at 1,596.39 points. Sub-indices of Hydropower and Microfinance groups went down 67.45 points and 59.48 points, respectively, closing at 1,918.7 points and 1,719.25 points.
Banking, the heavyweight group, also shed 52.33 points to finish at 1,205.54 points. Manufacturing and processing group went down 24.65 points to settle at 2,503.76 points. Sub-indices of Hotels and Finance groups also ended 21.98 points and 21.1 points lower at 2,086.55 points and 728.48 points. 'Others' group registered a loss of 12.43 points and ended at 829.17 points. 'Trading' group, however, gained 0.09 point to close at 196.37 points.
A total of 5.73 million units shares of 174 companies worth Rs 2.68 billion were traded in the market this week through 27,153 transactions. The turnover was 4.01 percent higher than the last week.
Rights shares of Kisan Microfinance Bittiya Sanstha Ltd, Kanchan Development Bank Ltd, Summit Microfinance Development Bank Ltd and Sanima Mai Hydropower Ltd were listed in the market this week for trading.