Kathmandu, January 26

Stakeholders have said that as banks and financial institutions (BFIs) have not yet complied to the previous mutual understanding reached with investors to decrease the interest rate on loans obtained to buy shares, Nepal Stock Exchange (Nepse) has not been able to perform as expected. As a result, the Nepse index fell by 1.26 per cent or 14.99 points in the trading week between January 20 and 24.

“There was an understanding between banks and share investors about a couple of months back that BFIs would reduce the interest rate on loans taken to buy shares,” aid Uttam Aryal, chairman of Investors Association of Nepal. “However, BFIs have not stuck to that commitment and as a result Nepse has been declining continuously.”

Aryal further stated that share investors are planning to protest against BFIs. “Earlier, the BFIs had agreed to decrease such interest rates to below 10 per cent from January 1 but they have not done so till date,” he added.

Meanwhile, sensitive index also fell by 0.94 per cent or 2.36 points to 248.65 points and float index dipped by 1.26 per cent or 1.08 points to 85.15 points.

In the review period, weekly turnover descended by 12.22 per cent as compared to the previous week to Rs 1.62 billion. In the previous week the market witnessed turnover of Rs 1.85 billion. Likewise, the daily average turnover also went down to Rs 325.16 million, which was a decline of 12.21 per cent in comparison to previous week when it stood at Rs 370.4 million.

The secondary market had opened at 1,187.77 points on Sunday and fell by 8.85 points by end of trading day. On Monday, market again dropped by 10.86 points. The local bourse, however, inched up by 0.77 point the next day and again by 4.15 points on Wednesday. However, the very next day it went down by 0.20 point to close the week at 1,172.78 points.

In the review week, only the finance and trading subgroups witnessed some gains. The trading sub-index increased by 1.11 per cent or 2.78 points to 252.59 points. Similarly, the finance subgroup rose by 0.19 per cent or 1.20 points to 610.93 points.

Meanwhile, the manufacturing sub-index led the pack of losers going down by 6.29 per cent or 141.02 points to land at 2,100.41 points for the week. The share price of Unilever Nepal fell by Rs 1,991 to Rs 20,892.

Similarly, the hydropower subgroup went down by 5.55 per cent or 73.85 points to 1,255.82 points with the share price of Upper Tamakoshi dipping by Rs 37 to Rs 274. Likewise, the life insurance subgroup went down by 1.15 per cent or 71.63 points to 6,104.11 points and the banking sub-index descended by 0.96 per cent or 9.76 points to 997.03 points.

The others subgroup, meanwhile, decreased by 0.54 per cent or 4.10 points to 740.94 points. Similarly, development banks sub-index also went down by 0.46 per cent or 6.80 points to 1,459.43 points.

Moreover, the microfinance sub-index also dipped by 0.45 per cent or 6.64 points to 1,440.81 points. The hotels subgroup also fell by 0.11 per cent or 2.02 points to land at 1,736.07 points and the non-life insurance sub-index inched down by 0.01 per cent or 0.91 point to 5,683.16 points.

In review week, Upper Tamakoshi Hydropower was the leader in terms of weekly turnover with Rs 481.90 million. It was followed by Citizen Investment Trust with Rs 108.13 million, Chhimek Laghubitta Bikas Bank with Rs 46.96 million, Machhapuchhre Bank with Rs 45.95 million and Prabhu Bank with Rs 37.56 million.

In terms of weekly trading volume too, Upper Tamakoshi took lead with 1,653,000 of its shares changing hands. Machhapuchhre Bank with 218,000 shares, NIBL Samriddhi Fund 1 with 189,000 shares, Prabhu Bank with 155,000 shares and NMB Hybrid Fund L-1 with 133,000 shares were other firms to record high trading volume.

Meanwhile, Upper Tamakoshi again topped the chart in terms of number of transactions — 28,877. It was followed by Kalika Power Company with 608, Citizen Investment Trust with 562, Panchakanya Mai Hydropower with 536 and Prabhu Bank with 476 transactions.