Stock market annual review : Growing from strength to strength

Kathmandu, August 1:

Despite a sluggish economy, share trading at the country’s sole secondary market posted a growth of more than two folds during the fiscal year 2004-05, compared to the same period during the last fiscal. According to the annual report for fiscal 2004-05 released today, the total value of traded shares at Nepal Stock Exchange (Nepse) stood at Rs 4.5 billion, registering a whopping growth of over 110 per cent against shares traded worth Rs 2.14 billion in 2003-04. The number of listed companies also increased to 125 in 2004-05 from 115 in the previous fiscal, whereas the number of share units traded registered a quantum jump of about three folds. A total of 18,433,000 shares were traded during the period, a quantum jump from 6,468,000 shares during the fiscal 2003-04. Besides this, the total price of listed shares also increased by 47.36 per cent, reaching Rs 16.77 billion. The total price of the listed shares was valued at Rs 11.38 billion in the fiscal year 2003-04. This growth has also pushed the total market capitalisation to a new height of Rs 61.36 billion, a 48.14 per cent growth against Rs 41.42 billion registered during the period of 2003-04 fiscal. The Nepse index rose to 286.67 points from 222.04 points.

“Such an outstanding growth has proved that the investors’ confidence has improved significantly in the secondary market,” said Mukunda Nath Dhungel, general manager at Nepal Stock Exchange Ltd. He also claimed that the investment climate has improved and more investors are coming to the secondary market. The government generated revenues worth more than Rs 45 million from the secondary market during the period. The government has already floated development bonds worth three billion rupees and will be listed soon for trading through Nepse floor, informed Dhungel, adding that government bonds would be opened for trading early September. “It will be yet another milestone for the security market, once the government bond is floated for trading,” he said. There are about 650,000 investors of the listed 125 companies. Share transaction started in 1994 with a manual ‘open out cry system’ at the Nepal Stock Exchange Ltd. It will soon have computerised trading automation system for trading. In this regard, the Corporate Financial Governance Project with a loan support from the Asian Development Bank (ADB) is underway, which is to be completed by the end of the current fiscal year.