Kathmandu, March 24

The attraction of investors towards the stocks of commercial banks, which have become relatively cheaper in recent days and have prospects of good returns, fuelled the bull run in the secondary market today. Consequently, the Nepal Stock Exchange (Nepse) index breached the threshold of 1,350 points for the first time.

“Stock investors were seen diverting from insurance and microfinance firms — which may be on verge of saturation — and picking up shares of banking stocks that may be a safer bet for now,” explained Prakash Rajaure, a stock market analyst. According to him, the rally witnessed today could be attributed to the rise in the banking subgroup as it has a majority stake in the market capitalisation of Nepse. The sub-index of commercial banks rose by 1.48 per cent to 1,233.87 points.

In fact, eight of the top 10 companies today in terms of turnover were commercial banks. Everest Bank topped in terms of turnover today with Rs 57.86 million, followed by NMB Bank (Rs 44.60 million), Nepal SBI Bank (Rs 41.82 million), Global IME Bank (Rs 38.60 million) and Nepal Bank (Rs 37.79 million).

Consequently, the benchmark index rose steadily in the morning trading hours and then was more of stable for the rest of the day. Opening at yesterday’s close of 1,345.53 points, Nepse index clocked a gain of 11.61 points or 0.86 per cent to rest at 1,357.14 points by the time of closing.

The others subgroup also posted hefty gain of 2.88 per cent to 839.99 points on the back of Nepal Telecom — the firm with highest market capitalisation — up Rs 20 to Rs 715.

Hotels, manufacturing and development banks posted muted gains of 0.99 point to 1,779.10 points; 0.26 point to 1,999.04 points and 0.01 point to 1,360.88 points.

Trading held steady at 201.38 points.

Conversely, as investors sought to offload overheated stock of insurance, hydropower and finance companies, the three sub-indices landed in the red.

Insurance was down 0.68 per cent to 6,336.45 points, hydropower shed 0.27 per cent to 2,318.39 points and finance dipped 0.17 per cent to 675.91 points.

Altogether, 1.33 million shares of 131 firms worth Rs 845.44 million were traded through 3,958 transactions today. The sensitive index rose 1.01 per cent to 292.48 points and float index inched up 0.79 per cent to 97.55 points.