Nepal | September 30, 2020

Nepse tumbles as spooked share investors resort to panic selling

Himalayan News Service
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Kathmandu, March 10

Rumours and speculations weighed on the share investors’ sentiment in the trading week between March 4 and 7, with the Nepal Stock Exchange (Nepse) index witnessing a week-on-week drop of 30.86 points or 2.29 per cent.

Opening at 1,345.99 points on Sunday, the benchmark index plunged by 41.56 points and fell by 16.69 points the next day. Thereafter, the local bourse reversed course and inched up by 8.70 points on Tuesday and rose by 18.69 points on Wednesday to close the week at 1,315.13 points. The market remained closed on Thursday in celebration of the International Women’s Day.

Finance Minister Yubraj Khatiwada’s recent interview with a foreign media, in which he hinted at clamping down on investment in unproductive sectors (like share market and realty) spooked the share investors, thereby resulting in panic selling and causing the secondary market to tumble in the first two trading days of the week.

However, the local bourse recovered some of the loss in the next two days, as market players took advantage of reduced share prices and some of the negative rumours making the rounds in the share market were dispelled. “Moreover, at
present share investors are in a wait-and-see mode regarding the whitepaper that the finance minister announced would be unveiled soon,” said a market analyst.

The sensitive index, which gauges the performance of class ‘A’ stocks, fell by 2.07 per cent or 5.92 points to 279.46 points. Similarly, the float index that measures the performance of shares actually traded also slipped by 2.26 per cent or 2.19 points to 94.70 points.

Similar to the previous week, every single subgroup land in the red this time around as well, with more than half of the indices slumping by over three per cent.

Hotels saw the biggest loss of 3.94 per cent or 78.36 points to 1,908.21 points. This was primarily because of Oriental’s share price taking a dive of 12.31 per cent to Rs 570. Soaltee slipped by 1.59 per cent to Rs 248 and Taragaon Regency fell by 1.07 per cent to Rs 277.

Manufacturing trailed close behind with a plunge of 3.76 per cent or 90.80 points to 2,323.33 points, weighed down by Himalayan Distillery plunging by 10.7 per cent to Rs 1,018, Bottlers Nepal (Tarai) down 7.38 per cent to Rs 6,174 and Unilever Nepal losing two per cent to Rs 27,244.

Microfinance descended by 3.67 per cent or 58.12 points to 1,526.80 points. Chhimek dropped by 7.14 per cent to Rs 910 and Nagbeli was down 3.08 per cent to Rs 2,200, among others.

Share value of Nepal Telecom fell by 2.41 per cent to Rs 730 and dragged the others subgroup down 3.55 per cent or 26.31 points to 714.89 points.

Similarly, hydropower dropped by 3.3 per cent or 55.10 points to 1,612.12 points and insurance fell by 3.13 per cent or 209.01 points to 6,468.34 points.

Because of commercial banks like Standard Chartered losing 4.25 per cent to Rs 900 and Everest down 2.86 per cent to Rs 780, the banking subgroup retreated by 1.62 per cent or 19.20 points to 1,163.77 points.

Finance dipped by 1.47 per cent or 10.12 points to 676.37 points, while trading shed 1.4 per cent or 2.96 points to 208.43 points.

Development banks managed to limit its loss to below one per cent — dipping by 0.84 per cent or 12.97 points to settle at 1,525.74 points for the week.

Altogether, 4.79 million shares of 171 companies were exchanged through 22,437 transactions in the review period. The traded amount of Rs 1.79 billion was 8.61 per cent less than the preceding week when 18,075 transactions of 4.53 million shares of 174 companies had been undertaken that totalled Rs 1.96

Nepal Life Insurance Co topped the chart both in terms of number of transactions and weekly turnover, recording 1,108 transactions to its name worth Rs 111.86 million. The remaining top five spots in terms of total weekly trading amount was secured by commercial banks — Sanima Bank with Rs 70.19 million, Nabil Bank with Rs 62.78 million, Standard Chartered Bank with Rs 59.36 million and Nepal Bank with Rs 58.76 million.

Meanwhile, Sanima Bank was the forerunner in terms of trading volume, with 201,000 of its shares changing hands.

A version of this article appears in print on March 11, 2018 of The Himalayan Times.

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