Monetary Policy hits Nepse, down 14 points

Kathmandu, July 25

After Nepal Rastra Bank made it mandatory for commercial banks to issue debentures/corporate bonds amounting to 25 per cent of its paid-up capital by the end of the fiscal year through the Monetary Policy that was unveiled on Wednesday, the Nepal Stock Exchange (Nepse) has dipped by 14.15 points to 1,269.92 points, due to fear of a credit crunch.

Uttam Aryal, chairperson of Investors Association of Nepal, informed that investors were not expecting such a provision to be included in the Monetary Policy. “Though the Monetary Policy has made attempts to reduce the banking interest rate, investors fear lack of cash flow in the market.”

According to him, investors were expecting the central bank to announce a big merger policy, which could have boosted investor confidence, as the price of the shares of smaller banks and financial institutions that they hold would subsequently rise, but it was not mentioned in the Monetary Policy.

The sensitive index, which measures the performance of class ‘A’ stocks, was down by 2.66 points to 273.47 points. Similarly, the float index that measures the performance of shares actually traded also dipped by 1.07 points to rest at 93.50 points.

All the 12 sub-groups at Nepse witnessed a drop today. By the end of the trading day, banking, trading, hotels, development banks, hydropower, non-life insurance, microfinance and mutual fund sub-indices declined by more than one per cent.

Altogether, 2.19 million shares of 171 companies that amounted to Rs 550 million were traded through 7,016 transactions today.

Share value of Union Hydropower, National Microfinance Bittiya Sanstha, Barun Hydropower and Nadep Laghubittiya Bittiya Sanstha plummeted by more than four per cent to Rs 85, Rs 1,499, Rs 91 and Rs 435, respectively, today.

Among the top gainers were Nepal Lube Oil, which surged by 8.81 per cent to Rs 210 and Shree Ram Sugar Mills, which rose by 4.61 per cent to Rs 227.