Kathmandu, June 1

After the government acknowledged contribution of the secondary market in the economy and expressed support for it the federal budget of fiscal year 2019-20, the country’s sole share market witnessed gain in the trading week between May 26 and 30.

“The government has finally recognised the secondary market as capital maker, which is a historical step,” said Uttam Aryal, chairman of Investors Association of Nepal.

However, he added that investors have been deprived of sufficient funds to invest in the secondary market. “The banks and financial institutions need to provide sufficient money for investment in the secondary market, and the government needs to create a conductive environment to eliminate the liquidity problem” he added.

Hence, the gain of Nepal Stock Exchange (Nepse) index was limited to 0.37 per cent or 4.92 points in the review week.

Similarly, sensitive index rose by 0.27 per cent or 0.77 point to 281.15 points and float index also increased by 0.29 per cent or 0.28 point to 96.62 points.

The weekly turnover, however, dropped by 13.77 per cent compared to the previous week to Rs 4.33 billion. In the previous week, the market had witnessed a turnover of Rs 5.02 billion. Likewise, the average daily turnover in the review week stood at Rs 866.32 million, down 13.77 per cent against Rs one billion recorded in the previous week.

In the review week, trading of mutual funds went up by 6.87 per cent to Rs 8.71 million. In the previous week, the mutual funds witnessed turnover of Rs 8.15 million. However, the trading of promoter shares plunged by 56.19 per cent to Rs 71.9 million, against Rs 164.1 million in the preceding week.

The benchmark index had opened at 1,314.55 points on Sunday and dropped by 11.94 points by the end of the trading day. However, on Monday, it reversed course and inched up by 0.34 point and added another 2.53 points the next trading day.

The market rose by 8.39 points on pre-budget optimism on Wednesday. Finance Minister Yubaraj Khatiwada had presented the federal budget for next fiscal year later that day. The local bourse gained 5.58 points on Thursday to close the week at 1,319.47 points.

In the review week, manufacturing, finance, banking, development banks and microfinance subgroups landed in the green zone, with manufacturing sub-index soaring by 7.33 per cent or 189.93 points to 2,781.58 points. This was on the back of share price of Shivam Cements surging by Rs 114 to Rs 661.

Similarly, finance sub-index advanced by 1.14 per cent or 7.05 points to 625.92 points.

Banking subgroup inched up by 0.79 per cent or 9.24 points to 1,176.66. Development banks rose by 0.5 per cent or 8.07 points to 1,607.75 points and microfinance sub-index also went up by 0.04 per cent or 0.64 point to 1,507.10 points.

Meanwhile, the hotels subgroup was the biggest loser of the week, dropping by 2.82 per cent or 61.02 points to 2,105.36 points. The sub-index was weighed down by share price of Soaltee dipping by five rupees to Rs 240 and of Oriental down by Rs 41 to Rs 654.

The life insurance sub-index also dropped by 1.81 per cent or 120.61 points to 6,529.67 points and non-life subgroups landed at 5,813.83 points, down 1.36 per cent or 80.4 points.

Moreover, trading sub-index dipped by 1.08 per cent or 2.79 points to 254.82 points. Others fell by 0.73 per cent or 5.58 points to 759.44 points and hydropower sub-index shed 0.3 per cent or 3.91 points to 1,274.97 points.

In the review week, Shivam Cements was the leader in terms of weekly turnover with Rs 661.19 million. It was followed by Prabhu Bank with Rs 439.55 million, Nepal Bank with Rs 338.15 million, Upper Tamakoshi Hydropower with Rs 261.76 million and NCC Bank with Rs 121.23 million.

In terms of weekly trading volume, Prabhu Bank took the lead with 1,587,000 of its shares changing hands.

Meanwhile, Shivam Cements also topped in terms of number of transactions with 5,763 deals.