Kathmandu, January 7

The Nepal Stock Exchange (Nepse) index surged by 114.90 points or 8.67 per cent to surge above the 2,100-point threshold in the trading week between January 1 and 5.

The market, which had remained volatile as a result of lack of liquidity in the country's financial sector, introduction of regressive policies and increased interest rates among various factors, affected the growth of the secondary market in the previous year. However, the reappointment of Bishnu Paudel to the post of country's finance minister was followed by a positive shift in the secondary market as the benchmark index had also taken a northward trend when he held office for two times previously, stakeholders say.

According to Tulsi Ram Dhakal, president of Nepal Investors Forum, reappointment of Paudel to the post of finance minister removed the tussle seen previously between the governor of Nepal Rastra Bank and the former finance minister Janardhan Sharma, which has boosted the confidence of investors towards the market.

He, however, said that this is not the time to stay idle but make effective changes and upgrades related to software used in the market and evaluate the gains witnessed through such efforts.

'Also, the introduction of various policies related to the market's growth including addition of brokers in the market and reservation of 10 per cent quota for foreign migrant workers, among other policies in the pipeline, have added to the positivity surrounding investors,' Dhakal said.

'But, the introduction of policy alone is not enough. It is more important to upskill and assist people in understanding the secondary market and the introduced policies to effectively utilise them and redirect their investments accordingly. The participation of migrant workers in the secondary market has been very low as they have little understanding of the market. The concerned bodies should increase financial knowledge among the country's citizens and assist them to make fundamental decisions related to investments in order to secure the steady growth of the stock exchange market,' he opined.

The sensitive index, which measures performance of class 'A' stocks, increased by 5.09 per cent or 19.92 points to 411.23 points in the review period. The float index that gauges performances of shares actually traded also gained 5.77 per cent or 8.21 points to settle at 150.43 in the review week.

Altogether 48.69 million shares were traded during the review week through 293,496 transactions that amounted to over Rs 19 billion. The weekly turnover soared by over 72.88 per cent compared to the previous week when 32.23 million shares had changed hands through 187,224 transactions that totalled Rs 10.99 billion.

It may be noted that the market was open just four days in the previous week compared to five trading days in the review week.

The average daily turnover in the past week was Rs 2.74 billion and it increased to Rs 3.80 billion this week.

The benchmark index had opened at 2,029.03 points on Sunday and increased by 17.23 points to close at 2,046.26 points for the day. The market added another 17.57 points on Monday to 2,063.83 points before losing 2.77 points on Tuesday to 2,061.06 points. On Wednesday, the market more than recouped the loss of the earlier day by jumping 64.78 points to breach the 2,100 threshold to rest at 2,125.84 points. The market gained 18.09 points on Thursday to settle at 2,143.93 points for the trading week.

All the subgroups landed in the green this week.

The finance subgroup increased by 6.68 per cent or 114.51 points to 1,829.45 points; hydropower by 7.61 per cent or 171.65 points to 2,426.31 points; investment by 9.77 per cent or 6.06 points to 68.11 points; non-life insurance by 9.99 per cent or 828.81 points to 9,123.56 points; development banks by 5.72 per cent or 205.94 points to 3,805.52 points; manufacturing and processing by 7.76 per cent or 404.06 points to 5,610.25 points; and others by 0.86 per cent or 13.28 points to 1,566.84 points.

Banking, the subgroup with the highest weightage in the market capitalisation, landed on 1,395.70 points, up by 2.19 per cent or 29.92 points. Hotels and tourism gained 14.15 per cent or 406.17 points to 3,276.75 points; mutual funds rose by 2.26 per cent or 0.31 point to 14.03 points; microfinance by 11.55 per cent or 518.34 points to 5,005.01 points; life insurance rose by 5.09 per cent or 512.83 points to 10,593.37 points; and the trading subgroup surged by 20.06 per cent or 391.11 points to 2,340.65 points.

A version of this article appears in the print on January 8, 2023, of The Himalayan Times.