Secondary market index declines by 23 points

Kathmandu, December 21

Even though banks and financial institutions have been willingly disbursing loans to share investors, the secondary market was not in a very optimistic mode due to rumours that the finance minister might soon be quitting office. Investors are unsure on whether the finance minister will leave office or stay back and bring some market-friendly laws and regulations.

As a result, investors are in a dilemma on whether to invest in shares or to divest their investment from their stock holdings and divert it to other sectors.

This uncertainty among investors subsequently hit the Nepal Stock Exchange (Nepse) with the benchmark index falling by 1.96 per cent or 23 points to 1,149.65 points in the review week between December 15 and 19. Similar to Nepse index, sensitive index also dropped by 1.47 per cent or 3.76 points to 251.84 points and float index also fell by 1.83 per cent or 1.60 points to 85.63 points.

Uttam Aryal, chairman of Investors Association of Nepal, said frustration among investors has been rising due to the government’s apathy regarding the concerns they have raised.

According to him, the finance minister and his policies are to be blamed for the bearish trend.

“We have been losing a huge amount of money since the current finance minister took oath of office,” adding, “We need a clear perspective from the finance minister regarding the share market.”

Aryal further said that investors have held numerous rounds of discussions with concerned authorities to seek viable solutions to the problems plaguing the share market at present. “But at the end of the day, no government authority seems to be concerned to address our issues.”

“If the finance minister is replaced with someone who understands the market, it won’t take long for Nepse to go on a bull run,” he claimed.

Against this backdrop, the weekly turnover dropped by 18.66 per cent as compared to the previous week to Rs 2.09 billion. In the previous week, the market had witnessed transactions worth Rs 2.56 billion.

Likewise, trading volume also went down to 6.52 million stocks changing hands this week from 8.24 million in the previous week.

The secondary market had opened on Sunday at 1,172.65 points and had dropped by 4.78 points by the end of the first trading day. The market again went down by 13.75 points on Monday. However, the index rose by 1.26 points on Tuesday.

But it fell by 3.31 points on Wednesday and 2.42 points on Thursday to close the week at 1,149.65 points.

In the review week, only trading subgroup was in the green zone soaring by 10.55 per cent or 54.02 points to 565.89 points.

It was due to the share price of Salt Trading Corporation going up by Rs 132 to Rs 1,622.

Meanwhile, life insurance was the biggest loser in the review week, slumping by 5.28 per cent or 306.24 points to 5,488.31 points as share price of Nepal Life Insurance Co fell by Rs 38 to Rs 877.

The non-life insurance subgroup lost 5.11 per cent or 240.81 points to 4,463.95 points due to share price of Everest Insurance Co descending by Rs 11 to Rs 263. Likewise, hotels sub-index fell by 4.89 per cent or 89.95 points to 1,749.35 points as share price of Soaltee Hotel declined by Rs 11 to Rs 180.

Moreover, hydropower subgroup decreased by 3.69 per cent or 36.11 points to 940.11 points due to share price of Chilime Hydropower going down by five rupees to Rs 358.

Likewise, microfinance also dropped by 3.22 per cent or 53.69 points to 1,609.76 points.

Meanwhile, others subgroup fell by 2.13 per cent or 14.07 points to 645.95 points. Likewise, development banks sub-index inched down by 0.95 per cent or 15.21 points to 1,573.81 points and banking subgroup decreased by 0.92 per cent or 9.67 points to 1,039.31 points.

The finance subgroup also descended by 0.42 per cent or 2.43 points to 569.84 points.

Likewise, manufacturing fell by 0.34 per cent or 7.43 points to 2,158.66 points and mutual fund subgroup inched down by 0.27 per cent or 0.03 point to 9.31 points.

In the review week, NMB Bank was the leader in terms of weekly turnover with Rs 316.22 million. It was followed by Nepal Bank with Rs 106.84 million, Nepal Life Insurance Co with Rs 76.88 million, NIC Asia Bank with Rs 72.52 million and Shivam Cements with Rs 51.40 million.

In terms of weekly trading volume too NMB Bank was the forerunner with 787,000 of its shares changing hands. It was followed by Nepal Bank with 340,000 shares, Prime Commercial Bank with 182,000 shares, NIC Asia Bank with 173,000 shares and Deva Bikas Bank with 170,000 shares.

Meanwhile, NMB Bank again topped in terms of number of transactions with 2,948 transactions.

It was followed by Rashuwagadhi Hydropower with 1,041, Sanjen Jalavidhyut with 898, Shivam Cements with 823 and Infinity Laghubitta Bittiya Sanstha with 801 transactions.