Kathmandu, April 29
The Nepal Stock Exchange (Nepse) index slipped by 14.67 points or 0.77 per cent in the trading week between April 23 and 27 to retreat below the 1,900-point threshold.
Although the apex court has given a green light to the Securities Board of Nepal (SEBON) for the distribution of licence related to opening of new stock exchange, commodity exchange and new stock brokers as long since demanded by stakeholders, various factors negating this implementation including tighter policies brought forth by the Nepal Rastra Bank, have hindered growth, market analysts say.
According to Chotte Lal Rauniyar, immediate past president of Nepal Investors Forum, while the new stock exchange and increase in number of brokers is expected to further develop the market through good competition and use of digital technology along with the introduction of intraday trading, auction market and short selling among other facilities, the assertion made by people's representatives at the Parliament against the process has further affected investors sentiment despite the apex court ruling in favour of SEBON.
"In addition, although banks have decreased the base rate, interest rates have remained unchanged. Also, the risk weighted average continues to stand at 150 per cent and the cap of Rs 120 million on loans for shares have not changed, which have kept fundamental investors at bay. We hope the upcoming Monetary Policy will address these issues and introduce policies which are in favour and for the development of the capital market," he shared.
The sensitive index, which measures performance of class 'A' stocks, dropped by 0.56 per cent or 2.03 points to 361.09 points in the review period. The float index that gauges performances of shares actually traded also fell by 0.77 per cent to 132.36 points.
Altogether 12.44 million shares were traded during the review week through 137,674 transactions that amounted to Rs 4.05 billion. The weekly turnover fell by 12.30 per cent compared to the previous trading week, when 14.96 million shares had changed hands through 131,789 transactions that had totalled Rs 4.62 billion.
The average turnover in the review week stood at Rs 810 million, compared to the average turnover of Rs 924 million in the previous week.
The benchmark index had opened at 1,904.40 points on Sunday and fell by 18.80 points to 1,885.60 points by the time of closing. The market gained 2.72 points on Monday to 1,888.32 points before adding 17.36 points on Tuesday. On Wednesday, the benchmark lost 13.68 points before falling again by 2.27 points on Thursday to settle at 1,889.73 for the trading week.
Apart from hotels and tourism, mutual funds and development banks, all the subgroups landed in the red in the review week.
Finance led the pack of losers after falling by 1.71 per cent to 1,577.82 points. Similarly, microfinance fell by 1.47 per cent to 3,362.45 points; hydropower decreased by 1.43 per cent to 2,430.22 points; trading fell by 0.99 per cent to 2,105.04 points; investment lost 0.96 per cent to 63.01 points; banking dropped by 0.75 per cent to 1,2,36.56 points; life insurance fell by 0.52 per cent to 9,427.36 points; others decreased by 0.43 per cent to 1,399.21 points; non-life insurance fell by 0.18 per cent to 8.589.92 points; and manufacturing and processing decreased by 0.02 per cent to 4,352.51 points.
Meanwhile, the hotels and tourism subgroup inched up by 0.84 per cent to 3,572.94 points; mutual funds rose by 0.59 per cent to 13.57 points and development banks by 0.12 per cent to 3,463.70 points.
A version of this article appears in the print on April 30, 2023, of The Himalayan Times.
