Kathmandu, July 26:

Defying all odds, stock trading continued to register an impressive growth, as the total trading volume of the listed shares at Nepal Stock Exchange (Nepse) recorded an upsurge of 142 per cent during the fiscal year 2006-07.

The trading volume touched Rs 8.36 billion, a historic high in the 13-year old secondary capital market trading of Nepal, states an annual review report of Nepal Stock Exchange Ltd (NSEL), released today.

Total market capitalisation of the listed companies grew significantly by 92.53 per cent to Rs 186.30 billion from Rs 96.76 billion a year ago. With a significant rise in share prices of commercial banks and other financial institutions, the total market capitalisation moved northward, says the report.

Although the total number of listed companies remained the same, the number of ‘A’ category companies rose to 66 from 56 during the review period.

The value of the listed shares also rose to Rs 21.74 billion, up from Rs 19.95 billion a year ago. It is mainly due to the issuance of bonus shares, rights shares and some initial public offerings.

The Nepse index, which is considered as a barometer to gauge the secondary market trend, registered almost two folds growth to close at 683.95 points at the end of the fiscal from 386.83 points last year.

Trading in government bonds and debentures was not satisfactory, as only seven transactions took place during the fiscal year. Llack of individual investors for the bond trading, while the institutional investors kept on holding the bonds caused the minimal trading in bonds, asserts the report.

“Difference in tax on interest for individual and corporate is also one of the reasons for minimal transaction of the bonds,” said Rewat Bahadur Karki, general manager at NSEL. He disclosed that NSEL generated a revenue of over Rs 250 million as capital gains from the trading of stocks at Nepse.

Disclosing the future plan, Karki informed that stock trading will be entering into fully computerised automation from August 18. NSEL also plans to introduce internet based trading with the development of necessary software and hardware network.

The necessary infrastructure and procedures will be set up to allow investment by Non-Resident Nepalis (NRNs) and foreign institutional investors within the fiscal year, said Karki.