KATHMANDU, March 31: The Nepal Stock Exchange (Nepse) benchmark index rose 53.81 points to close at 1,587.64 points on Thursday -- the last trading day of the week.
The stock market remained volatile throughout the week as investors jostling to buy shares in the first two trading days were also quick to off-load them to book some profits from the sudden upswing in share prices.
Preparations for local-level polls boosted the confidence of investors, lifting the benchmark index by double digits in the first two days trading -- Sunday and Tuesday. The market was closed for trading on Monday due to a public holiday for the Ghodejatra festival.
Nepse had to impose circuit breakers and suspend operations on both days due after rapid upswings in the benchmark index. However, there were some corrections in the last two trading days as investors tried to book profits from the heavy surge in stock prices. Analysts attribute positive vibes among investors to the preparations for local-level elections. This caused the stock market rally after it had been on a downward trend due to shortage of lendable funds in the banking system.
“As the possibility of local-level polls being held has gone up, investors have also become buoyant. Money stuck in follow-on public offerings also returned to the market. Those investors who were on wait-and-watch mode are also coming to buy,” Anjan Raj Poudyal, a former president of Stock Brokers Association of Nepal (SBAN), said. “Turnover and transaction volume have also doubled,” he added.
Though the problem of shortage of lendable funds is yet to go away, investors say they are less stressed about margin calls from bank and financial institutions (BFIs).
Except for the Manufacturing and the Processing group, all trading groups ended in the green zone. Investors of insurance companies were the biggest gainers of the week as the sub-index for the companies surged 420.72 points to close at 7,850.99 points. Sub-indices of the Development Bank and the Banking groups also rose 60.18 points and 51.24 points respectively, ending at 1,776.47 points and 1,493.82 points. Shares of the HydroPower group also climbed up 15.54 points to finish at 2,010.3 points. The index for finance companies ended 34.34 points higher at 724.78 points. The Hotels and the Others groups also posted gains of 10.32 points and 10.7 points, respectively, to end at 2,064.37 points and 684.29 points. The Trading group also inched up 1.68 points to close at 207.84 points.
A total of 14.04 million units of shares of 159 companies worth Rs 7.19 billion were traded at the market this week through 4,5072 transactions.