Investors’ confidence in stock market dips : Share transaction value in millions

Kathmandu, August 13 :

Investor’s are slowly losing confidence in the stock market due to dismal pros-pects of the listed companies. As a result, transaction of shares has plummeted by over 23 per cent in the fiscal year 2005-06.

The share transactions has declined to Rs 3451.43 million in the year 2005-06 in comparison to Rs 4507.68 million in 2004-05.

Of the total companies listed in the Nepal Stock Exchange Limited (Nepse), commercial banks group has secured highest turn-over that stands at Rs 269-6.28 million, of the total transactions value of Rs 3451.43 million. Of the total share transaction value, co-mmercial banks group captured 78.12 per cent, while development banks group captured 2.40 per cent. Finance companies secured second position in overall share transaction value am-ounting to Rs 305.86 million in the fiscal year 2005-06 compared to 216.37 million in 2004-05. The group captured 8.86 per cent of the total transactions.

The share transaction value of manufacturing and processing enterprises’ group has declined to Rs 17.19 million in 2005-06 from Rs 114.90 million in 2004-05 due to frequent industrial unrest caused by conflict and weak investment environment.

However, Hotel group has improved its performance. The sector’s value of share transactions stood at Rs 19.77 million compared to Rs 4.48 million in 2004-05. According to the annual report of the Nepse — that is yet to be made public — daily turnover of the shares transactions also went down to Rs 15.14 million in 2005-06 compared to 19.10 million in 2004-05.

Meanwhile, the number of listed companies has increased from 14 to 15 in the commercial banks groups, from seven to eight in development banks group, 14 to 15 in insurance companies sector and 44 to 50 in finance companies section. There has been no new entry in the manufacturing and processing groups.

According to the report, “Market capitalisation has increased to Rs 96763.74 million in 2005-06 compared to Rs 61365.89 million in 2004-05.”

The bad performance of the stock market is attributed to market imperfection and lack of awareness.