Nepal | September 21, 2020

Secondary market still stuck in the doldrums

Himalayan News Service
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Kathmandu, February 16

As the banks and financial institutions are still facing a problem of liquidity crisis and have not been able to provide loans to investors, the country’s sole secondary market witnessed a downward trend yet again in the review week. The other
aspect that has been hitting the market is the compulsory provision of Personal Account Number (PAN) the government plans to introduce from April 15.

As a result of the aforementioned factors, Nepal Stock Exchange (Nepse) index dropped in the trading week between February 10 and 14 by 2.34 per cent or 26.70 points to 1,112.87 points. This is the lowest level that the Nepse index has shrunk to since December 5 last year when it was at 1,118.13 points.

“As BFIs have refused to release loans for share transactions, investor sentiment in the market has dampened considerably and to compound the problem is the PAN provision that the government is all set to implement from the Nepali new year,” said Uttam Aryal, chairman of Investors Association of Nepal. “The government needs to immediately address the liquidity problem.”

Similar to Nepse index, the sensitive index also decreased by 2.34 per cent or 5.70 points to 236.91 points and float index went down by 2.41 per cent or two points to 80.86 points.

In the review period, weekly turnover increased by 101.9 per cent as compared to the previous week to Rs 3.03 billion. In the previous week the market witnessed turnover of Rs 1.50 billion. Likewise, the daily average turnover also went up to
Rs 607.48 million, which was a rise of 101.89 per cent in comparison to previous week when it stood at Rs 300.89 million.

The secondary market had opened at 1,139.57 points on Sunday and went down by 12.04 points by the end of the day. On Monday, the market edged up by 1.33 points. However, the local bourse dipped by 0.67 point on Tuesday. On Wednesday too, the market declined by 7.11 points. It further descended by 8.21 points the next day to close the week at 1,112.87 points.

In review week, only the manufacturing and trading subgroups were in the green zone. The manufacturing sub-index rose by 1.84 per cent or 35.94 points to land at 1,981.72 points. Share price of Unilever Nepal increased by Rs 704 to Rs 18,870. Likewise, the trading sub-index inched up by 0.06 per cent or 0.17 point to 251.37 points.

Meanwhile, the life insurance subgroup led the pack of losers declining by 4.29 per cent or 250.54 points to 5,581.94 points due to share price of Nepal Life Insurance dropping by Rs 52 to Rs 1,010. Moreover, non-life insurance subgroup fell by 3.32 per cent or 182.31 points to 5,305.56 points as share price of Himalayan General Insurance declined by Rs 10 to Rs 377.

Similarly, the hydropower sub-index slipped by 3.19 per cent or 37.42 points to 1,132.71 points with share price of Upper Tamakoshi shrinking by Rs 10 to Rs 228. Likewise, microfinance subgroup fell by 2.57 per cent or 36.78 points to 1,388.72 points as the share price of Chhimek Laghubitta Bikas Bank went down by Rs 12 to Rs 864.

Meanwhile, the others subgroup also shrunk by 2.46 per cent or 17.94 points to 711.04 points. It was due to the share price of Nepal Telecom dropping by Rs 15 to Rs 695.

Likewise, banking sub-index went down by 2.15 per cent or 21.02 points to 955.19 points with the share price of Everest Bank falling by Rs 12 to Rs 505. The development bank subgroup too contracted by 1.38 per cent or 19.90 points to 1,417.03 points.

Moreover, finance subgroup went down by 1.09 per cent or 6.57 points to 593.14 points and the hotels subgroup inched down by 0.56 per cent or 9.59 points to land at 1,691.3 points.

In the review week, Everest Bank (Promoter Share) was the leader in terms of weekly turnover with Rs 191.76 million. It was followed by Upper Tamakoshi Hydropower with Rs 62.12 million, Prabhu Bank with Rs 43.65 million, Citizen Investment Trust with Rs 39.67 million and NCC Bank with Rs 39.62 million.

In terms of weekly trading volume, Everest Bank (Promoter Share) again took the lead with 7,236,000 of its shares changing hands. Upper Tamakoshi Hydropower with 270,000 shares, Prabhu Bank (Promoter Share) with 226,000 shares, NCC Bank with 191,000 shares and Prabhu Bank with 186,000 shares were the other top firms to record high trading volume.

Meanwhile, Upper Tamakoshi Hydropower topped the chart in terms of number of transactions — 4,506. It was followed by Samudayik Laghubitta Bittiya Sanstha with 1,234, Prabhu Bank with 637, NMB Bank with 517 and Nepal Life Insurance with 515 transactions.

NEW LISTINGS

Company                                                                    Type                               Units

Janaki Finance                                                             Bonus                             887,466

Muktinath Bikas Bank                                                  Bonus                           4,729,968.06

NCC Bank                                                                     Rights                           7,911,281

Nirdhan Utthan Laghubitta Bittiya Sanstha                 Bonus                            2,000,000

Western Development Bank                                       Bonus                            747,561.6


A version of this article appears in print on February 17, 2019 of The Himalayan Times.


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