Nepse at a fresh peak

Kathmandu, July 26

The effects of reduction in fees of stock brokers could be seen in domestic share market for the second consecutive day, as daily turnover reached a fresh all-time high of Rs 2.75 billion today.

Last week, the Securities Board of Nepal (SEBON), the securities market regulator, had reduced the brokerage fees on share and bond transaction by up to 60 per cent. The rule was supposed to be enforced from the beginning of this week, but since stock brokers had not updated their system to the new provision, trading in the country’s sole secondary market had remained halted the entire day on Sunday.

Hence, Nepal Stock Exchange (Nepse) opened for trading at 1,798.83 points on Monday, as the new rates were implemented. The local bourse had set numerous records yesterday — the benchmark index had jumped by 2.2 per cent, or 39.66 points, to a fresh peak of 1,838.49 points; daily turnover stood at an all-time high of Rs 2.24 billion; and market capitalisation surged past the two-trillion-rupee mark to Rs 2.02 trillion for the first time.

Stock analysts seem to have rightly predicted after SEBON’s announcement that the move would encourage short-term investors. Extension of trading hours from 11:00am to 3:00pm from the earlier noon to 3:00pm schedule could have also prompted the number of transactions to surge.

Today, the domestic share market topped all the records of yesterday, clocking 11,743 transactions of 5.89 million shares of 143 companies that amounted to Rs 2.75 billion. The Nepse index advanced by 1.5 per cent or 28.01 points to close at a fresh high of 1,866.50 points.

All the subgroups, apart from manufacturing which dipped 2.27 per cent to 2,767.56 points — landed in the green zone today.

Today’s market rally was led by development banks and hotels — up 3.99 per cent to 1,925.05 points and 3.66 per cent to 2,153.37 points, respectively.

While gain of commercial banks was relatively muted at 1.57 per cent to 1,763.57 points, the banking sub-index has major weightage on Nepse index. In fact, commercial banks had secured top four positions in terms of turnover today. Current bullish market is also ‘seasonal’ as Nepse is normally northbound between mid-July to mid-September.