Kathmandu, January 14

The Nepal Stock Exchange (Nepse) index inched up by 5.46 points or 0.25 per cent, clocking the third consecutive week-on-week gain in the trading week between January 8 and 12.

After severe volatile as a result of lack of liquidity in the country's financial sector, the share market has started witnessing gains since the trading week of December 26 after the reappointment of Bishnu Paudel to the post of country's finance minister.

With recent growth seen in the sector, stakeholders and investors have mixed feelings regarding the index's sustainability and a bullish trend in the market.

While many have their fingers crossed for the market to grow further in the coming days, others have opined that the recent growth in the market is not sustainable as the economic indicators of the country are yet to improve further before the market can witness a bullish trend.

According to Gyanendra Lal Pradhan, coordinator of the energy development council of CNI and capital market advisor for FNCCI, despite the market taking a northward trend in recent days, the growth is not secure unless the liquidity situation improves in the country which also strengthens the purchasing capacity of the people.

'As the share market can change its trajectory at any given time, the market tends to take a short-term course within a limited period and mirrors the economy in the long term. At present, there is less chance of seeing industrial growth, entry of new businesses, or the central bank financing a new hydropower project which has led the people to switch to the share market. Although there is less chance of the market decreasing further, the market is still far from witnessing a strong bullish correction despite the recent increment in the market's index,' Pradhan had told The Himalayan Times earlier.

While the formation of a new government and the fact that the indicators regarding the market are positive for now, it cannot be regarded as the same in the long term as the country is still in huge debt, has witnessed decreased revenue, and is still low on forex reserves, he added.

The sensitive index, which measures performance of class 'A' stocks, increased by 0.02 points to 411.25 points in the review period. The float index that gauges performances of shares actually traded also edged up 0.57 per cent or 0.85 points to settle at 151.28 in the review week.

Altogether 64.10 million shares were traded during the review week through 343,088 transactions that amounted to over Rs 23.91 billion. The weekly turnover soared by over 25 per cent compared to the previous week when 48.69 million shares had changed hands through 293,496 transactions that totalled Rs 19 billion.

It may be noted that the market was open just four days in the review week compared to five trading days in the previous week. In this regard, the average daily turnover in the past week was Rs 3.80 billion and it increased to Rs 5.97 billion this week.

The benchmark index had opened at 2,143.93 points on Sunday and increased by 20.68 points to close at 2,164.61 points for the day. The market added another 47.15 points on Monday to surface above the 2,200-point threshold to 2,211.76 points, before losing 21.34 points on Tuesday to close at 2,190.42 points.

On Wednesday, the market remained closed on the occasion of Prithvi Jayanti but then lost 41.03 points on Thursday to rest at 2,149.39 points for the trading week.

All the subgroups, apart from manufacturing and processing, hotels and tourism, others, finance and microfinance, landed in the green this week.

The manufacturing and processing sub group slumped by 4.51 per cent or 253.15 points to 5,357.10 points; microfinance dropped 3.91 per cent or 195.89 points to 4,805.12 points; finance decreased by 3.03 per cent or 55.41 points to 1,774.04 points; hotels and tourism fell by 2.36 per cent or 72.27 points to 3,199.48 points; and others shed 0.92 per cent or 14.38 points to 1,552.46 points.

Meanwhile, mutual funds led the pack of gainers, advancing by 4.28 per cent or 0.60 point to 14.63 points. Close on its heels, hydropower jumped 4.21 per cent or 102.13 points to 2,528.44 points; and the trading subgroup rose by 3.30 per cent or 77.32 points to 2,417.97 points.

Life insurance rose by 0.93 per cent or 98.79 points to 10,692.16 points. Banking, the subgroup with the highest weightage in the market capitalisation, landed on 1,406.82 points, up 0.80 per cent or 11.12 points. Nonlife insurance edged up by 0.55 per cent or 50.46 points to 9,174.02 points; development banks by 0.24 per cent or 8.98 points to 3,814.50 points; and investment by 0.10 per cent or 0.07 points to 68.18 points.

A version of this article appears in the print on January 15, 2023, of The Himalayan Times.