Nepse trading volume hits all-time high

Kathmandu, June 14

Share transaction at the domestic stock market sailed past the two-billion-rupee mark for the first time in history today to hit an all-time high of Rs 2.2 billion, as a large number of shares of insurance companies and banking institutions exchanged hands.

Trading volume at Nepal Stock Exchange (Nepse), which used to hover around a few hundred million rupees per day until some time ago, has lately started to skyrocket because of launch of fully automated share trading, securities ownership transfer and clearance services.

The use of electronic shares, or dematerialised stocks, has enabled investors, who buy shares in bulk, to slice them in smaller portions before selling them.

“Previously, when companies issued physical securities ownership certificates, investors, who bought shares in bulk, had to pay split charges and wait for certain days before selling the shares in small volumes. But with the introduction of electronic stocks, investors do not have to deal with all these hassles,” said Stockbroker Anjan Poudel. “This, on the one hand, has helped raise trading volume, while, on the other, allowed small investors, who buy 10, 20 or 30 units

of shares, to take part in the trading.”

Also, Nepse has fully enforced provision on T+3, under which all payments related to share trading must be settled within three days. “Due to this facility, investors who could revolve capital two to three times a month in the past, can now do so in a week. This has increased velocity of money, which is the reason why stock market is seeing rise in trading volume,” Poudel said.

Of the total trading volume recorded at Nepse today, 22 per cent, or Rs 400 million, came from transaction of promoter shares of Nepal Insurance Company Ltd. Among others, large volumes of shares of Nepal Bangladesh Bank, Rural Microfinance Development Centre, Standard Chartered Bank Nepal and Everest Bank also traded hands.

Nepse index ended the day at 1,614.15 points, up 4.56 points, or 0.28 per cent. Biggest gainers of today were Bhargav Bikash Bank, Bottlers Nepal (Terai), Vijaya Laghubitta Bittiya Sanstha, Butwal Power Company and ILFCO Microfinance Bittiya Sanstha.