Share market investors in wait-and-see mode

Kathmandu, January 4

Even though banks and financial institutions have been providing sufficient amount of loans to share investors in recent days, the secondary market started the New Year 2020 on a cautious mode as investors are waiting for more positive cues.

As per investors, as the ruling Nepal Communist Party (NCP) has not recommended name of current Finance Minister Yubaraj Khatiwada for the National Assembly, he could be removed from the minister’s post. And investors feel that the secondary market will boom in the coming days if that happens. However, the government has the right to extend Khatiwada’s tenure.

Uttam Aryal, chairman of Investors Association of Nepal, said investor sentiment will solely depend in the coming days on whether Khatiwada will exit or not. “If the finance minister is removed, secondary market will rise as expected. Otherwise, it will remain the same.”

Aryal further said investors have not invested in secondary market due to risk factor. “We are in a wait-and-see mode on the government’s future course of action. If the government allows Khatiwada to continue as finance minister, then nothing positive will happen and the market will face more frustrations,” he said, adding, however, in recent days, some positive changes have been made by the government and the market is increasing gradually.

Against this backdrop, Nepal Stock Exchange index declined in review week between December 29 and January 2. The index fell by 0.10 per cent or 1.20 points. Likewise, sensitive index dropped by 0.86 per cent or 2.18 points to 252.18 points and float index decreased by 0.14 per cent or 0.12 point to 86.41 points.

The weekly turnover also dropped by 15.13 per cent as compared to the previous week to Rs 2.39 billion. In the previous week, the market had witnessed transactions worth Rs 2.81 billion. The trading volume too descended to 7.18 million stocks changing hands this week from 8.95 million in previous week.

The secondary market had opened on Sunday at 1,167.42 points. It had gone down by 4.99 points by the end of the first trading day. On Monday, it increased by 5.53 points. However, the index fell by 1.92 points on Tuesday. On Wednesday though it rose by 3.47 points. But it again dropped by 3.29 points on Thursday to close the week at 1,166.22 points.

In review week, trading, hotels, manufacturing, life insurance, microfinance, mutual funds and development banks landed in green zone.

Trading subgroup was the biggest gainer in the review week, soaring by 12.66 per cent or 76.72 points to 682.77 points.

It was due to share price of Salt Trading Corporation ascending by Rs 226 to Rs 1,980 and Bishal Bazzar by Rs 202 to Rs 1,882.

Hotels increased by 6.59 per cent or 118.81 points to 1,920.99 points as share price of Soaltee Hotel rose by Rs 15 to Rs 197.

Manufacturing expanded by 3.61 per cent or 84 points to 2,412.33 points on back of share price of Bottlers Nepal (Tarai) rising by Rs 50 to Rs 6,150.

Moreover, life insurance sub-index jumped by 3.55 per cent or 201.24 points to 5,862.58 points with share price of Nepal Life Insurance Co gaining Rs 32 to Rs 950. Likewise, microfinance rose by 3.39 per cent or 55.15 points to 1,679.48 points with the share price of Chhimek Laghubitta Bikas Bank rising by Rs 22 to Rs 810.

Mutual funds sub-index edged up by 0.21 per cent or 0.02 point to 9.28 points and development banks subgroup inched up by 0.14 per cent or 2.34 points to 1,590.58 points.

Meanwhile, others was biggest loser of the week, declining by 4.95 per cent or 33.92 points to 651.71 points. It was due to the share price of Nepal Telecom falling by Rs 44 to Rs 613. Similarly, finance went down by 1.15 per cent or 6.62 points to 569.47 points and banking sub-index dropped by 0.73 per cent or 7.64 points to 1,036.02 points.

Hydropower subgroup fell by 0.23 per cent or 2.17 points to 934.53 points and non-life insurance fell by 0.14 per cent or 6.36 points to 4,524.19 points.

In the review week, Nepal Life Insurance was the leader in terms of weekly turnover with Rs 268.44 million. It was followed by Shivam Cements with Rs 199.18 million, Himalayan Distillery with Rs 97.45 million, NIC Asia Bank with Rs 62.39 million and Citizen Investment Trust with Rs 61.50 million.

In terms of weekly trading volume, Shivam Cements was forerunner with 420,000 of its shares changing hands. It was followed by Nepal Life Insurance with 279,000 shares, Soaltee Hotel with 192,000 shares, NMB Bank with 180,000 shares and Nepal Bank with 179,000 shares.

Meanwhile, Nepal Life Insurance Co recorded the highest number of transactions — 2,342.

It was followed by Shivam Cements with 1,900, Rasuwagadhi Hydropower with 989, Sanjen Jalavidhyut with 641 and Himalayan Distillery with 776 transactions.