Kathmandu, November 12

The Nepal Stock Exchange (Nepse) index plunged by 65.04 points or 3.69 per cent to 1,697.17 points in the trading week of November 7 to 10 as liquidity tightened in the domestic market and interest rates of banks started going up.

“If you look at the general trend, interest rates of banks is inversely related to the share market, meaning when one goes up, the other comes down,” explained Shreejesh Ghimire, CEO of NMB Capital.

After opening for only one day after the Tihar holidays in the previous week, the secondary market had remained closed on Sunday as the country observed Chhath.

On Monday, the benchmark index was at 1,762.21 points when the secondary market opened for trading. It had shed 13.09 points by the day’s closing. The local bourse was southward bound for most part of the week, as Nepse dropped by 24.63 points to 1,724.49 points on Tuesday and declined by 27.63 points to retreat below the psychological level of 1,700 points — a two-and-a-half month low — on Wednesday.  The secondary market, however, managed to end the week on a positive note as Nepse index inched up 0.31 point to settle at 1,697.17 points.

According to Bachchu Ram Rimal, general secretary of  Nepal Investors Forum, Nepse is also under pressure owing to issuance of  rights shares as well as initial public offerings. Stating the domestic share market has relatively matured in the recent years as share investors have also become more aware Rimal opined it is unlikely the secondary market will witness any massive volatility in the days to come.

“Nepse index will likely hover around the current level until mid-January,” he said.

Altogether, 4.07 million shares of 146 companies that amounted to Rs 2.84 billion changed hands through 18,317 transactions during the review period.

The sensitive index, which gauges the performance of class ‘A’ stocks, dropped by 14.65 points or 3.84 per cent to 367.02 points. Similarly, float index that measures the performance of shares actually traded also fell by 4.99 points or 3.78 per cent to 126.84 points.

Apart from trading, which remained stationery at 202.79 points, all the subgroups recorded losses during the week.

Hydropower saw the biggest plunge of 106.99 points or 4.57 per cent to 2,233.42 points. Chilime’s share value went down by 2.33 per cent to Rs 1,213, Sanima Mai’s slid by 4.15 per cent to Rs 924 and Api’s slumped by 6.48 per cent to Rs 577, among others.

Insurance subgroup took a dive of 374.2 points or 4.1 per cent to 8,761.49 points. This was on the back of share price of insurance companies like Nepal Life falling 4.4 per cent to Rs 1,195 and National Life down 3.64 per cent to Rs 3,180.

Banking sub-index took a beating of 67.55 points or 4.07 per cent to 1,592.43 points. Shareholders of Standard Chartered saw the value of their scrips drop by 7.33 per cent to Rs 3,225, while Everest lost 3.3 per cent to Rs 3,544.

Development banks was down 64.26 points or 3.46 per cent to 1,792.92 points. Chhimek dropped 3.04 per cent to Rs 2,040, Swabhalamban took a dive of 6.76 per cent to Rs 2,400 and Nagbeli shed 2.16 per cent to Rs 4,520.

Hotels descended by 65.68 points or 2.88 per cent to 2,216.3 points. Soaltee fell by 3.02 per cent to Rs 418, Taragaon was down 5.66 per cent to Rs 250 and Oriental dipped 1.72 per cent to Rs 515.

Manufacturing dropped by 63.05 points or 2.73 per cent to 2,245.78 points, weighed down by Unilever Nepal’s share price down 3.93 per cent to Rs 29,655.

Whereas finance fell by 19.27 points or 2.35 per cent to 798.91 points, others managed to limit its loss to 5.49 points or 0.73 per cent to 748.78 points.

Meanwhile, Civil Bank was the forerunner in all three categories — weekly turnover, trading volume and number of transactions — with 584,000 of its scrips worth Rs 192.73 million changing hands through 1,749 transactions.

The other listed companies to make to the list of top five in terms or turnover were Muktinath Bikas Bank with Rs 169.48 million, Bank of Kathmandu Lumbini with Rs 144.71 million, Everest Bank with Rs 139.39 million and Neco Insurance with Rs 90.27 million.