KATHMANDU, OCTOBER 22
Nepal Stock Exchange (Nepse) index fell by 26.49 points or 1.42 per cent to 1,844.14 between October 16 and 20. The market was open for just four days and was southbound throughout the trading week.
According to market analysts, the existing liquidity crunch in the country's financial system, hiked interest rates for loans, low confidence among investors, and the ongoing festive season are to be blamed for muted transactions and trading volume in the stock market.
Chhote Lal Rauniyar, former president of Nepal Investors Forum, said that the shareowners are reluctant to sell their shares at a loss, reducing the number of transactions in the market.
"With the market losing over 1,400 points within a year, shareholders are in the wait-and-see mode at the moment. However, with decreasing credit-deposit ratio and increasing remittance inflow, the liquidity situation will stabilise very soon," he shared.
He also said that the market could see some positive results after the festive season. "Investors are waiting for the right opportunity to enter the market again. However, they are reluctant to invest at present due to low confidence in the market and the increase in interest rates by banks in recent days. The high interest rates are not only affecting the stock market but other business sectors and industries as well," he shared.
Rauniyar also complained that the Nepal Rastra Bank has remained mum on the actions of banks to hike interest rates. "The silence of the central bank is surprising and makes one wonder if anything fishy is going on," he added.
The sensitive index, which measures the performance of class 'A' stocks, dropped by 1.11 per cent or 4.09 points to 363.05 points in the review period.
The float index that gauges the performances of shares actually traded also fell by 1.19 per cent to 129.17 points.
Altogether 7.90 million shares were traded during the review week through 67,955 transactions that amounted to Rs 2.47 billion. The weekly turnover decreased by 36 per cent compared to the previous trading week, when 12.228 million shares had changed hands through 76,392 transactions that totalled Rs 3.88 billion.
The average turnover in the review week stood at Rs 617 million.
The benchmark index had opened at 1,870.76 points on Sunday and fell by 9.69 points to 1,860.94 points by the time of closing. The market lost 2.61 points on Monday to close at 1,858.33 points. The market remained closed on Tuesday as the country mourned the passing of veteran cultural historian and polymath Satya Mohan Joshi.
On Wednesday, the benchmark fell again by 12.81 points to 1,845.52 points before shedding 1.38 points to 1,844.14 points on Thursday.
Banking and hotels and tourism were the only subgroups to land in the green. Banking gained 0.14 per cent, while hotels and tourism rose by 1.10 per cent.
Meanwhile, manufacturing and processing subgroup fell by 0.97 per cent.
Others sub-index fell by 1.59 per cent, hydropower dropped by 4.12 per cent, trading by 1.49 per cent.
Similarly, non-life insurance fell by 1.75 per cent, finance by 5.52 per cent, development banks by 3.65 per cent, microfinance by 1.73 per cent, life insurance by 1.45 per cent, mutual funds by 0.44 per cent and investment by 3.06 per cent.
A version of this article appears in the print on October 23, 2022 of The Himalayan Times.
