Nepse sails past 1,600-point threshold

Kathmandu, June 13

The domestic stock market index surpassed 1,600-point mark today to close at fresh all-time high of 1,609.59 points.

Nepal Stock Exchange (Nepse) index, which opened for trading at 1,597.96 points, advanced 11.63 points, or 0.73 per cent, throughout the day, as demand for shares of commercial and development banks went up.

The banking sub-index inched up 1.02 per cent today to end the day at 1,480.71 points, while development bank sub-index closed 2.66 per cent higher at 1,594.06 points.

The top gainers of today were mostly microfinance development banks, with Rural Microfinance Development Centre (RMDC) leading the chart. Shares of RMDC today surged by 10 per cent to Rs 1,166, while other microfinance development banks, like First Microfinance Development Bank, ILFCO Microfinance Bittiya Sanstha, Swarojgar Laghubitta Bikas Bank and NMB Microfinance Bittiya Sanstha also booked heavy profits.

“One of the main reasons that is pushing up demand for shares of microfinance development banks is rumours that the central bank will soon instruct these institutions to raise the paid-up capital,” Stockbroker Anjan Poudel told The Himalayan Times.

Although insurance sector, until some time ago, was advancing rapidly because of same rumours, shares of insurance companies have now started undergoing correction, with insurance sub-index today closing 0.57 per cent lower at 8,635.78 points.

“Insurance sub-index fell today because investors, who had bought insurance stocks, have gradually started to book profit and divert funds to other areas,” said Poudel.

Investors now have the flexibility to rapidly divert funds from one sector to the other with the launch of fully automated share trading, securities ownership transfer and clearance services.

With commencement of these services, Nepse has fully enforced provision on T+3, under which all payments are settled within three days of share trading.

“Because of these facilities, investors who could revolve capital two to three times a month can do so in a week. This has increased velocity of money, which is why stock market is seeing rise in trading volume,” Poudel said.

The total turnover in the stock market, which used to hover around few hundred million rupees per day until some time ago, has lately started to cross Rs one billion mark, with today’s trading volume standing at Rs 1.7 billion.