Kathmandu, January 28

The Nepal Stock Exchange (Nepse) index inched up by 4.40 points or 0.20 per cent, clocking the fifth consecutive week-onweek gain in the trading week between January 23 and 26.

Although the market has witnessed a steady growth over the past few weeks, high interest rates, the central bank's decision to limit marginal loans and apply 150 per cent risk weight for share loans among other factors have pushed fundamental and longterm investors from reentering the market at present, limiting the secondary market from taking a steady growth path, stakeholders say.

According to Tulsi Ram Dhakal, president of Nepal Investors Forum (NIF), although the market has witnessed a steady growth recently, , almost 95 per cent of investors at present are traders or short-term investors. 'There are three types of investors in the market at present. People who are short-term investors like traders, those who are investing through initial public offerings (IPOs) and long-term investors. With a high rate of interest on loans and risk weight of 150 per cent on share loans alongside the imposed limitation of Rs 120 million on margin loans, many investors have refrained from entering the market at the moment. Unless professional and fundamental investors reenter the sector, it is difficult for the market to take a bullish trend,' he said.

He also opined that the market may continue to grow at a steady pace in the coming days and expressed his belief that the issues seen in the economy and the share market will be addressed through the upcoming mid-term Monetary Policy review. 'If the central bank wants to, it has a list of tools it can use to address the present issues. I think the NRB will create a suitable environment and utilise its tools at hand to ease the liquidity situation after the review. This will eventually address the increased interest rate and increase investment flow into the market as well,' he said.

The sensitive index, which measures performance of class 'A' stocks, shed 0.46 per cent to 413.14 points in the review period.

Meanwhile, the float index that gauges performances of shares actually traded edged up 0.13 per cent or 0.20 points to settle at 153.51 in the review week.

Altogether 36.35 million shares were traded during the review week through 219,940 transactions that amounted to over Rs 13.19 billion. The weekly turnover rose by over 12 per cent compared to the previous week when 33.43 million shares had changed hands through 191,732 transactions that totalled Rs 11.69 billion.

It may be noted that the market was open for just three days in the previous week compared to four days in review week. In this regard, average daily turnover in the past week was Rs 3.89 billion against Rs 3.29 billion this week.

The benchmark index had opened at 2,178.81 points on Monday before losing 13.71 points by the time of closing. The market gained 8.25 points on Tuesday to close at 2,173.25 points before jumping by 10.37 points on Wednesday to 2,183.62 points. On Thursday, the benchmark index dipped by 0.41 points to close at 2,183.21 points for the trading week.

More than half of the subgroups landed in the red this week.

Banking, the subgroup with the highest weightage in the market capitalisation, landed at 1,401.14 points, down 0.04 per cent or 0.40 points. Development banks slumped by 2.04 per cent or 80.25 points to 3,849 points; investment fell by 2.01 per cent or 1.42 points to 69.37 points; manufacturing and processing lost one per cent or 52.73 points to 5,239.76 points; others was down 0.84 per cent or 13.18 points to 1,562.85 points, mutual funds dropped 0.67 per cent or 0.10 points to 14.86 points and microfinance edged down by 0.12 per cent or 5.84 points to settle at 4,822.74 points.

Meanwhile, non-life insurance led the pack of gainers, advancing by 2.98 per cent or 274.70 points to 9,488.40 points, followed by life insurance, up by 2.91 per cent or 312.01 points to 11,025.11 points.

Hotels and tourism jumped 2.28 per cent or 75.31 points to 3,375.36 points; finance rose by 2.05 per cent or 37.19 points to settle at 1,851.13 points; trading increased by 1.08 per cent or 24.98 points to 2,337.28 points and hydropower gained 0.79 per cent or 21.45 points to settle at 2,727.52 points in the trading week.

A version of this article appears in the print on January 29, 2023, of The Himalayan Times.