Banking sector weighs on stock market

Kathmandu, July 24

Nepal Stock Exchange (Nepse) index fell by 0.4 per cent or 6.48 points to 1,629.08 points today, primarily due to drop of banking sub-index — the share market heavyweight.

Even as insurance subgroup gained 100.7 points or 1.09 per cent to land at 9,369.25 points and manufacturing sub-index added 39.78 points or 1.63 per cent to rest at 2,481.65 points today, the drop of 1.05 per cent or 15.26 points to 1,432.47 points by the banking sector and decline of 26.71 points or 1.16 per cent to 2,275.19 points by the hotels dragged the benchmark index down.

According to Anjan Raj Paudel, former chair of Stock Brokers Association of Nepal, share investors are more attracted towards the insurance companies these days, which is also reflected in the secondary market.

“Investors have been scooping up the shares of insurance companies lately as most of the banks have already met the capital requirement criteria, whereas insurance companies are under pressure to increase their paid-up capital,” he added.

Insurance Board, the regulatory authority of insurance sector, has directed life insurance companies to increase their paid-up capital to Rs two billion from Rs 500 million and non-life insurance companies to hike their capital to Rs one billion from Rs 250 million by July 16, 2018.

In the tug of war between the bear and bull today, the market slipped nominally. However, the total turnover remained over Rs one billion.

Altogether 1.74 million shares of 153 listed companies with total value of Rs 1.07 billion were traded through 9,210 transactions today.

Sanima Mai Hydropower Company topped the chart with total turnover of Rs 87.95 million. Share price of National Hydro Power Company increased by 10 per cent to Rs 154 whereas investors of Gurkhas Finance saw their share value drop by 6.25 per cent to Rs 180 per unit.