KATHMANDU, DECEMBER 6

The trading at the country’s sole secondary market was halted at 2:13pm and suspended for the rest of the day after the Nepal Stock Exchange (Nepse) index slumped by six per cent or 123.34 points to 1,932.11 points today.

The last time the market had observed a six per cent circuit breaker was on July 19. Back then, however, the benchmark index had surged by six per cent.

The sensitive Index that measures the performance of class ‘A’ stocks declined by 5.51 per cent or 21.62 points to 370.67 points.

The float index that gauges the performance of shares actually traded also fell by 5.48 per cent or 7.59 points to 130.82 points.

A total of 15.49 million shares of 197 companies worth Rs 7.20 billion were traded through 61,858 transactions today.

Owing to immense selling pressure, all subgroups landed in the red today, with others subgroup plunging by 9.13 per cent or 164.09 points to 1,633.76 points. The sub-index of life insurance dived by 8.26 per cent or 1,093.32 points to 11,565.88 points; manufacturing and processing dropped by 7.59 per cent or 362.41 points to 4,411.82 points; and trading fell by 7.42 per cent or 159.54 points to 1,991.78 points.

Meanwhile, sub-index of microfinance declined by 7.03 per cent or 224.19 points to 2,964.43 points; non-life insurance by 5.74 per cent or 569.25 points to 9,343.35 points; hydropower by five per cent or 86.61 points to 1,645.16 points; banking by 4.33 per cent or 64.9 points to 1,433.69 points; and hotels by four per cent or 81.99 points to 1,968.48 points.

The sub-index of development banks descended by 3.44 per cent or 76.27 points to 2,143.10 points; that of finance by 2.18 per cent or 19.53 points to 875.87 points; and mutual funds closed at 11.21 points, down 1.78 per cent or 0.2 point.

Nepal Reinsurance Co Ltd (NRIC) was the forerunner in terms of trading volume, number of transactions and turnover today, with 714,611 of its shares changing hands through 7,419 transactions that amounted to Rs 1.16 billion.

Shareholders of nine companies saw the value of their holdings increase today despite a sharp decline in the market.

These included Himalayan Bank Debenture, Prabhu Bank Debenture, Narayani Development Bank Ltd, Corporate Development Bank Ltd, Manjushree Finance Ltd, among others.

Meanwhile, Deprosc Laghubitta Bittiya Sanstha Ltd was the top loser, with its share value plunging by 10 per cent to Rs 1,287. Share prices of NRIC, Nepal Telecom, Sanjen Hydropower, Himalayan Distillery, Shivam Cement, Himalayan General Insurance also fell significantly.

According to Radha Pokhrel, president of Nepal Punjibazaar Laganikarta Sangh, the recent report of the Nepal Rastra Bank (NRB) planning to alter margin lending rules through the monetary policy review was largely to be blamed for today’s immense selling pressure.

“Any change in margin lending rules primarily affects shortterm investors and we think many of them offloaded their holdings to secure profits, which resulted in the massive drop of the benchmark index today.”

In the meantime, share investors submitted a memorandum to NRB Deputy Governor Chinta Mani Siwakoti, demanding withdrawal of the decision of reviewing the margin loan provision.

“Deputy Governor Siwakoti was very positive towards our demand and assured us that no decision will be taken against welfare of investors,” she added.