Sensex to make market receptive
Kathmandu, January 7:
As the Nepali stock market gets modernised with some reforms to bring in stability in share prices and develop it as a barometer of the economy within a free market system, a Sensitive Index (Sensex) has been introduced in the Nepse for the past one week.
Stock market experts, while discussing with The Himalayan Times, commented that the new Sensitive Index, like in other countries, would inform investors about the price movement in shares of companies which are categorised under the Nepse Sensitive Index.
Rewat Bahadur Karki, general manager of Nepal Stock Exchange Ltd informed that the new index would help disseminate reliable information to investors and bring stable growth in the stock market.
Karki said that NEPSE Sensitive Index increased by 1.93 points compared to the first day of the trading. On January 1, Nepse Sensitive Index registered 129.56 points, which today rose to 131.46 points.
Under the Nepse Sensitive Index, 56 companies have been listed out of a total 140, informed Karki. This shows that these companies are rated ‘A’ class and maintain financial details. Although, the Sensitive Index increased by only 1.93 points, the general Nepse index increased by 9.05 points compared to January 1 index that reflects overall performance of the stock market. Karki said that general index does not reflect actual performance of listed companies and the economy as a whole.
Navaraj Pokhrel, president of Stock Brokers Association of Nepal (SBAN), commented that it is a good start to have Nepse Sensitive Index of the Nepali stock market. However, he said, it should reflect the overall economic performance. He said that the composition in the Nepse Sensitive Index is not correct. He felt that the management of Nepal Stock Exchange Ltd has included only super-structure issues such as financial institutions in the sensitive index, while the economic structure is missing. Pokharel said that there was no representation of industrial sector in the category of Sensitive Index.
Under the Nepse Sensitive Index, daily transactions exceeded over Rs 12.4 million while market capitalisation reached Rs 86 billion. Traded shares accounted for 15,538 from 81 transactions, according to Karki, GM of Nepal Stock Exchange Ltd.
The total ‘A’ graded companies whose shares were traded today were Nepal Investment Bank, Everest Bank, Bank of Kathmandu, Kumari Bank, Nepal Merchant and Finance, Standard Finance Ltd, Nepal Industrial and Commercial Bank, Standard Chartered Bank, Development Credit Bank, Machhapuchhre Bank and Laxmi Bank Ltd.
Total market capitalization from general NEPSE index comes to be Rs 133 billion, informed Karki. NEPSE Sensitive Index covers 75 per cent of the total market capitalisation, da-ily transactions 60 per cent and listed securities trading 50 per cent, he said. He hoped that share prices would see stability from sensex. The companies whose paid-up capital is more than Rs 20 million and regularly registering profits for the past three years will be listed under Nepse Sensex. Similarly, firms can be listed under this index if they have released timely information to the public and have more than 1,000 shareholders, he informed.