Due to the pressure to pay back the loans for this fiscal year-end by share investors, the Nepal Stock Exchange (Nepse) index went down by 2.31 per cent or 28.84 points in the trading week between June 17 and 21.
“The banks need to increase margin lending to the investors. The loan to value ratio for credit to share investors should be raised to 70 per cent from the existing 50 per cent,” said Uttam Aryal, chairman of Nepal Investors Association, adding that if this happens then the share market will grow.
“The government should introduce better policies and laws regarding the stock market,” Aryal said. “In recent days the share market is in a bearish trend because we are close to the end of the fiscal year and investors need to pay back the loans of this fiscal.”
The benchmark index, which had opened at 1,247.3 points on Sunday, had plunged by 14.07 points by the first trading day of the week to close at 1,233.23 points. It inched up slightly by 1.92 points on Monday to land at 1,235.15 points, however it dipped by 8.97 points on Tuesday to rest at 1,226.18 points.
The local bourse continued its downward trend by dropping 8.34 points to 1,217.84 points on Wednesday. On Thursday, the index, however, rose by 0.62 point to close the trading week at 1,218.46 points.
Meanwhile, the sensitive index went down by 2.31 per cent or 6.06 points to 255.75 points. The float index also shed 2.58 per cent or 2.32 points to 87.38 points.
In the review period, all 10 subgroups landed in red zone. The insurance subgroup was biggest loser and plunged by 2.79 per cent or 177.28 points to rest at 6,175.74 points. Asian Life Insurance’s share value went down by Rs 30 to Rs 670.
Similarly, the hydropower sub-index went down by 2.63 per cent or 40.84 points to 1,510.66 points. Api Power Company’s share value fell by Rs 24 to Rs 295. Meanwhile, the microfinance subgroup also dropped by 2.58 per cent or 43.01 points to rest at 1,623.69 points. The share price of Chhimek Laghubitta Bikas Bank was down by Rs 35 to Rs 895.
The development banks subgroup plummeted by 2.53 per cent or 36.91 points to close the week at 1,418.07 points. Similarly, hotels subgroup went down by 2.45 per cent or 46.47 points to 1,848.69 points with the share price of Oriental Hotels tumbling by Rs 19 to Rs 523.
Meanwhile, banking — the subgroup with the highest weightage in the share market — decreased by 2.36 per cent or 24.98 points to 1,029.23 points. This was due to commercial banks like Everest losing Rs 11 to Rs 675 and Standard Chartered dipping by Rs 16 to Rs 754.
Likewise, finance sub-index fell by 1.77 per cent or 11.05 points to 613.18 points. The share price of Janaki Finance was down by Rs 10 to Rs 163. Meanwhile, the manufacturing subgroup also plunged by 1.61 per cent or 38.41 points to 2,341.27 points with the share price of Bottlers Nepal (Terai) down by Rs 62 to Rs 5,750.
Trading subgroup also went down by 1.43 per cent or 2.87 points to land at 197.54 points and others subgroup too shed 1.1 per cent or 7.98 points to close the week at 715.48 points.
Altogether, 4.96 million shares of 190 companies worth Rs 1.12 billion were traded through 17,228 transactions in the week. The traded amount was 34.72 per cent lower than the total weekly turnover of the previous week, which was recorded at Rs 1.72 billion. In the past week, 4.8 million shares of 186 companies had changed hands through 23,368 transactions.
In the review week, Nepal Bank took lead in terms of trading volume with Rs 73.36 million worth of transactions. Similarly, in terms of number of shares, Mega Bank took the lead with 269,000 of its shares changing hands and Unnati Laghubitta Bittiya Sanstha had the highest number of transactions — 1,396.
Mega Bank with Rs 47.4 million, NMB Bank with Rs 46.63 million, Gramin Bikash Laghubitta Bittiya Sanstha with Rs 46.14 million and Unnati Laghubitta Bittiya Sanstha with Rs 39.61 million rounded up the top five companies in terms of weekly turnover.
|Asian Life Insurance||Rights||4,027,966.20|
|First Microfinance Laghubitta Sanstha||Rights||2,281,313|
|Kamana Sewa Bikash Bank||Rights||3,094,154.77|
|Nerude Laghubitta Bittiya Sanstha||Bonus||397,800|
|Sindhu Bikash Bank||Rights||535,301.40|
A version of this article appears in print on June 24, 2018 of The Himalayan Times.
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