Nepal | September 28, 2020

Nepse hits all-time high of 1,212 points as weeks-long bull-run continues

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Kathmandu, January 17

The Nepal Stock Exchange index hit a record high today on the first day of the implementation of the much-awaited dematerialised form of share-trading.

The benchmark index surged by 21.84 points to 1,212 points today. Earlier, the local bourse had dipped after recording 1205.84 points on September 15.

The continued bull run was witnessed in the market in the last few weeks due to flush liquidity in the market, according to Rabindra Bhattarai, stock market analyst.

“Simplification of share transaction after full-fledged implementation of dematerialised system in the secondary market, and encouraging political cues played a crucial role in the continuous bull run in the stock market.”

Investors were also lured to the stock market as Nepal Rastra Bank recently extended the default period for the repayment of loans and interests that matured in the second quarter of this fiscal till the third quarter April 12.

The bull run in the stock market was led by the insurance sector. The insurance sub-index increased by 127.98 points or 2.38 per cent to 5,503.72 points.

In terms of total turnover, the banking sector topped all the subgroups with total traded amount of Rs 306.57 million.

The volume of shares of the banking sector traded at the stock market has been increasing due to NRB’s instruction to commercial banks to raise paid-up capital from the current Rs 2 billion to Rs 8 billion.

All the sub-indices, except hydropower, witnessed gains today. Sub-indices of development banks, finance, hotels and others surged by 1.57 per cent, 0.21 per cent, 0.92 per cent and 1.49 per cent to 1,158.13 points, 586.86 points, 1,742.74 points and 798.88 points, respectively.

However, the hydropower subgroup was in the red today, as it dipped by 0.13 per cent to 2,161.54 points.

In total, 825,954 shares of 89 firms worth Rs 548.12 million were traded through 2,569 transactions today. The sensitive index, which gauges the performance of class ‘A’ stocks, rose 1.77 per cent to 260.36 points.

Likewise, the float index that measures the performance of shares actually traded also went up 1.96 per cent to 86.71 points.

Altogether, 172 companies out of the 232 listed companies have acquired membership of the Central Depository System and Clearing Ltd.

A further 60 firms are yet to become members of CDS and Clearing Ltd for the admission of their securities for dematerialisation.

Companies that have not taken membership of CDS and Clearing Ltd were suspended from trading today.

Forty of the 60 companies are in the process of merger and acquisition, which is why they have not taken the membership to dematerialise their securities.

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