Nepal | December 05, 2019

Liquidity crunch dampens share investors’ sentiment

Himalayan News Service

Kathmandu, February 9

The country’s sole secondary market witnessed a downward trend in the past week due to the liquidity crisis being faced by banks and financial institutions (BFIs).

Likewise, there were talks in the market that share investors would have to mandatorily require Personal Account Number (PAN) for stock transaction and this also affected investor sentiment. As a result, the Nepal Stock Exchange (Nepse) index declined in the trading week between February 3 and 7 by 1.89 per cent or 22.05 points.

“Since BFIs have been unable to release sufficient funds to investors it has dampened the enthusiasm in the secondary market,” said Ambika Prasad Poudel, chairman of Nepal Investors Forum. He further added that since many reputed economists and academicians have been recently saying that the country’s economy is not moving in a positive direction investors are not so keen in making investments.

Similar to the Nepse index, the sensitive index also decreased by 1.69 per cent or 4.18 points to 242.61 points and float index went down by 1.46 per cent or 1.73 points to 82.86 points.

In the review period, weekly turnover increased by 12.42 per cent as compared to the previous week to Rs 1.50 billion. In the previous week the market witnessed turnover of Rs 1.33 billion. Likewise, the daily average turnover also went up to Rs 300.89 million, which was a rise of 12.42 per cent in comparison to the previous week when it stood at Rs 267.64 million.

The secondary market had opened at 1,161.63 points on Sunday and went down by 8.51 points by the end of the trading day. On Monday, the market again decreased by 8.85 points. However, the local bourse witnessed an increment of 2.82 points on Tuesday. The next day, however, the market again dropped by 7.37 points. The index continued with its downward trend, falling by 0.15 point on Thursday to close the week at 1,139.57 points.

In the review week, all the subgroups remained in the red zone. The hydropower sub-index led the pack of losers dipping by 3.99 per cent or 48.67 points to 1,170.13 points with the share price of Upper Tamakoshi shrinking by Rs 20 to Rs 238.

Similarly, the manufacturing subgroup went down by 3.90 per cent or 79 points to land at 1,945.78 points for the week. Share price of Unilever Nepal fell by Rs 1,491 to Rs 18,166.

The life insurance sub-index dropped by 3.90 per cent or 188.29 points to land at 5,832.48 points due to the share price of Nepal Life Insurance declining by Rs 33 to Rs 1,055. Likewise, the others subgroup also dipped by 3.12 per cent or 23.49 points to 728.98 points due to the share price of Nepal Telecom descending by Rs 22 to Rs 707.

Moreover, non-life insurance subgroup fell by 1.68 per cent or 94.15 points to 5,487.87 points and hotels sub-index decreased by 1.56 per cent or 26.98 per cent to land at 1,700.89 points.

Meanwhile, microfinance sub-index also declined by 1.37 per cent or 19.91 points to 1,425.49 points. Likewise, banking subgroup went down by 1.30 per cent or 12.93 points to 976.21 points with the share price of Nepal Investment Bank dropping by Rs 11 to Rs 521.

The development bank sub-index too reduced by 1.11 per cent or 16.21 points to 1,436.93 points. Likewise, trading subgroup fell by 1.06 per cent or 2.70 points to 251.19 points and the finance sub-index inched down by 0.95 per cent or 5.75 points to 599.71 points.

In the review week, Upper Tamakoshi Hydropower Ltd was the leader in terms of weekly turnover with Rs 104.48 million. It was followed by Nepal Bank with Rs 66.55 million, Nepal Telecom with Rs 61.67 million, Machhapuchhre Bank with Rs 59.31 million and Citizen Investment Trust with Rs 57.95 million.

In terms of weekly trading volume, Machhapuchhre Bank (Promoter Share) took the lead with 522,000 of its shares changing hands. Upper Tamakoshi with 426,000 shares, Nepal Bank with 230,000 shares, Prabhu Bank (Promoter Share) with 142,000 shares and NMB Bank with 125,000 shares were other top firms to record high trading volume.

Meanwhile, Upper Tamakoshi again topped the chart in terms of number of transactions — 5,973. It was followed by Samudayik Laghubitta Bittiya Sanstha with 1,851, Mero Microfinance Bittiya Sanstha with 537, Nepal Investment Bank with 516 and Nepal Life Insurance with 474 transactions.

New Listings

Company………………………. Type………………. Units

City Express Finance………….. Rights………………..2,500,000

Hamro Bikas Bank……………… Bonus……………….. 118,137

Sahara Bikas Bank……………… Bonus………………. 903,721.3N

 


A version of this article appears in print on February 10, 2019 of The Himalayan Times.


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