KATHMANDU, SEPTEMBER 30
The Nepal Stock Exchange (Nepse) index fell by 25.48 points or 1.26 per cent in the trading week between September 24 and 28 to 2,004.30 points.
The sensitive index, which measures the performance of class 'A' stocks, dropped by 1.49 per cent to 382.94 points in the review period. Meanwhile, the float index that gauges performances of shares actually traded also lost 1.13 per cent or 1.59 points to rest at 139.22 points in the review week.
According to experts, the existing policies of the Nepal Rastra Bank (NRB) related to Rs 120 million cap on margin loans, high-risk weighted average, interest rates, and weak investor sentiment have continued to affect the market's growth.
"Although the monetary policy showed no negative signs for the share market, the long-awaited demands of the investors towards the central bank to remove the cap of Rs 120 million on margin loans, replacing credit to core-capital plus deposit (CCD) ratio to credit-deposit (CD) ratio, and reducing risk-weighted average to 100 per cent and interest rates were not mentioned in the new monetary policy. As a result, the market index has been floating around the 2,000-point threshold," Chhote Lal Rauniyar, a market analyst, said.
He shared that although companies have started to allocate dividends to shareholders alongside the entry of the festive season, there has been little improvement in the market due to weak investor sentiment at present.
"Unless that improves, the market will not see a steady growth. Investors have also requested the government to reduce capital gains tax to three per cent for the short term and by five per cent for the long term for the market's improvement.
Due to the strict monetary policy of the Nepal Ratra Bank in the previous year, banks could not disperse loans to investors which reduced investment circulation in the market. Although the financial indicators of the country have seen significant improvements compared to the past, the interest rates of the banks have not decreased which is questionable," he added.
Rauniyar, however, shared that following some improvement in financial indicators at present and the commitments made by the authorities for market improvement, the issues surrounding the share market's growth are expected to be resolved soon.
Altogether 31.28 million shares were traded during the review week through 296,414 transactions, which amounted to over Rs 7.80 billion. The weekly turnover was up by 5.85 per cent compared to the previous week when 24.13 million shares had changed hands through 284,156 transactions that had totalled Rs 7.36 billion.
Meanwhile, the average daily turnover in the past week was over Rs 1.84 billion and it rose to Rs 1.95 billion this week. It has to be noted, that the secondary market has remained open for just four days due to public holidays for the past two weeks compared to five trading days in a normal week.
The benchmark index had opened at 2,029.78 points on Sunday and it fell by 19.43 points by the time of closing to 2,010.35 points. The market fell by 5.90 points on Monday to 2,004.45 points before increasing by 18.46 points on Tuesday. On Wednesday, the market fell by 18.61 points to 2,004.30 points. The market remained closed on Thursday on the occasion of Indra Jatra festival.
All of the subgroups apart from microfinance, hydropower, and mutual funds landed in the red this week.
Hotels and tourism led the pack of losers after slumping by 3.32 per cent to 5,393.13 points, followed by investment, down 2.68 per cent to 69.12 points.
Development banks fell by 2.60 per cent to 3,818.77 points; trading by 2.50 per cent to 2,947.74 points; non-life insurance decreased by 2.35 per cent to 10,512.23 points; finance fell by 2.08 per cent to 1,760.52 points; others by 1.78 per cent to 1,452.97 points; life insurance by 1.77 per cent to 10,758.32 points; manufacturing and processing by 1.70 per cent to 5,254.77 points, and banking by 1.25 per cent to 1,252.78 points.
Meanwhile, microfinance rose by 0.75 per cent to 3,691.99 points; hydropower inched up by 0.62 per cent to 2,190 points and mutual funds rose by 0.53 per cent to 18.93 points.
A version of this article appears in the print on October 1, 2023, of The Himalayan Times
