KATHMANDU, NOVEMBER 26
The Nepal Stock Exchange (Nepse) index fell by 3.28 points or 0.17 per cent to 1,933.55 between November 20 and 24. The market was open for only three days in the review week due to elections and was southward bound in first two trading days.
According to market analysts, the existing liquidity crunch in the country's financial system and difficulty in receiving loans from the banks are to be blamed for slow growth of stock market.
Kumar Keshar Bista, a financial analyst and adviser, opined that the liquidity situation will not be resolved unless remittance flow into the country continues to improve for the next six to seven months.
"The secondary market has not been able to grow due to lack of liquidity in the country. The situation will not improve unless remittance flow continues to increase for the next seven months. Although provisions required for the market's growth, including a new stock exchange market and new stockbrokers, among others, have been introduced by the Securities Board of Nepal (SEBON), it will still take some time for added provision to make a positive effect on the market. However, if remittance flow continues to improve and the liquidity situation improves, the secondary market will also witness significant growth after mid- March of next year," Bista told The Himalayan Times.
The sensitive index, which measures the performance of class 'A' stocks, dropped by 0.14 points or 0.04 per cent to 380.92 points in the review period. The float index that gauges the performances of shares actually traded, however, edged up by 0.08 per cent to 135.57 points.
Altogether 9.17 million shares were traded during the review week through 60,614 transactions that amounted to Rs 3.30 billion. The weekly turnover slumped by 37 per cent compared to the previous trading week, when 14.10 million shares had changed hands through 103,514 transactions that totalled Rs 5.319 billion. It may be noted that the market was open for five days in the previous week compared to only three days in the review week.
In this regard, the average daily turnover of Rs 1.10 billion this week was, in fact, an improvement from the previous week's Rs 1.06 billion.
The benchmark index had opened at 1,936.83 points on Tuesday and fell by 7.13 points to 1,929.70 points by the time of closing. The market lost 7.71 points on Wednesday to close at 1,921.99 points. On Thursday, the benchmark index gained 11.56 points to settle at 1,933.55 points for the week.
Majority of the subgroups landed in the red today, although five of them witnessed gains.
The banking and trading subgroups gained 0.03 per cent and 1.17 per cent, respectively. Meanwhile, the manufacturing and processing, finance and life insurance subgroups rose by 1.20 per cent, 0.70 per cent and 0.06 per cent, respectively.
Meanwhile, hotels and tourism fell by 0.73 per cent, others by 0.32 per cent, hydropower by 0.64 per cent, non-life insurance fell by 0.69 per cent, development banks by 0.35 per cent, microfinance by 0.23 per cent, mutual funds by 0.14 per cent and investment by 1.11 per cent.
A version of this article appears in the print on November 27, 2022, of The Himalayan Times.
