Kathmandu, August 3

While the row related to capital gains tax (CGT) in share transactions has been resolved, the country’s sole secondary market remained weighed down by investor pessimism in the trading week between July 28 and August 1.

According to Prakash Rajhaure, an independent share market analyst, though their major concern related to the CGT has now been addressed, investors still lack confidence to make bulk transactions.

He further said that even as there is enough liquidity, banks and financial institutions (BFIs) are in a waitand-see mode owing to confusion related to margin lending. “The BFIs are waiting for policy clarity.”

Consequently, Nepal Stock Exchange (Nepse) index slipped by 0.48 per cent or 6.08 points in the review period. Likewise, sensitive index also went down by 0.34 per cent or 0.94 point to 272.53 points and float index dipped by 0.57 per cent or 0.53 point to 92.97 points.

Nevertheless, the weekly turnover went up by 5.48 per cent as compared to the previous week to Rs 2.09 billion.

In the previous week, the market witnessed turnover of Rs 1.97 billion. The trading volume also jumped from 7.19 million shares in the preceding week to 7.48 million stocks changing hands this week.

Trading of mutual funds’ scrips surged by 30.83 per cent to Rs 16 million from previous week’s turnover of Rs 12.23 million.

The benchmark index had opened at 1,269.92 points on Sunday and slumped by 17.11 points by the time of closing. The local bourse recovered some of the loss over the next three days — going up by 3.18 points on Monday, 3.39 points on Tuesday and 6.18 points on Wednesday. On Thursday, however, Nepse shed 1.72 points to close the week at 1,263.84 points.

In the review week, microfinance, mutual funds and finance subgroups recorded gains.

The microfinance subgroup soared by 5.26 per cent or 78.49 points to 1,569.65 points, with the share price of Chhimek Laghubitta Bikas Bank up seven rupees to Rs 997.

The mutual funds sub-index rose by 1.92 per cent or 0.19 point to 10.08 points and the finance subgroup went up by 0.99 per cent or 6.23 points to 630.96 points.

Banking subgroup, which has highest weightage in the benchmark index, was the biggest loser in the review week. It dropped by 1.05 per cent to 12.12 points to 1,136.30 points. Similarly, life insurance fell 1.04 per cent or 62.51 points to 5,894.32 points and trading fell by 1.01 per cent or 2.61 points to 254.62 points.

Manufacturing sub-index declined by 0.72 per cent or 19.43 points to 2,652.89 points and hydropower subgroup slipped by 0.65 per cent or 7.83 points to 1,182.78 points. The others sub-index dipped by 0.63 per cent or 4.62 points to 718.39 points and hotels subgroup went down by 0.48 per cent or 10.17 points to 2,066.66 points.

The development banks subgroup shed 0.38 per cent or 6.30 points to 1,616.91 points and non-life insurance landed at 5,073.53 points, down 0.35 per cent or 17.99 points.

In the review week, Nepal Bank was the leader in terms of weekly turnover with Rs 112.04 million. It was followed by Agricultural Development Bank with Rs 104.08 million, Prabhu Bank with Rs 89.09 million, Neco Insurance Co (Promoter Share) with Rs 74.56 million and Shivam Cement with Rs 68.90 million.

NMB Sulav Investment Fund-1 was the forerunner in terms of weekly trading volume, with 423,000 of its shares changing hands. It was followed by NIBL Samriddhi Fund-1 with 343,000 shares, Nepal Bank with 330,000 shares, Prabhu Bank with 323,000 shares and Laxmi Value Fund-1 with 311,000 shares.

Meanwhile, Infinity Laghubitta Bittiya Sanstha recorded highest number of transactions — 2,064. United Insurance Co (Nepal) with 1,182, Upper Tamakoshi Hydropower with 995, Asha Laghubitta Bittiya Sanstha with 868 and Prabhu Bank with 821 transactions rounded up the top five in this category.