Weekly share update : Bloodiest week at Nepse

Kathmandu, August 5 :

A turmoil due to confusion created by the capital adjustment provision in the new Monetary Policy, led to the biggest loss in share trading at Nepal Stock Exchange (Nepse) this week, as the trading index plummeted by about 31 points. The fall is the highest ever for intra-week trading in 12-year long history.

The turmoil came after investors refused to take part in trading, saying the new provision to raise paid-up capital requirement for commercial banks could result in the heavy fall of share prices. Despite Nepal Rastra Bank and bankers’ clarification, share prices as well as the Nepse index dropped constantly throughout the week.

Trading opened at 386.59 points but plunged by 7.74 points to close at 378.76 points on Sunday, while it registered a huge slip of 12.03 points on Monday, as the trading closed at 366.73 points. The nose-dive extended further and trading on Tuesday dropped by 8.04 points and closed at 358.69 points. Stock trading stabilised somewhat on Thursday, as the index dropped by only 3.09 points and the weekly trading closed at 355.60 points.

The Nepse also witnessed a huge loss in the total market capitalisation, as most commercial banks’ share prices started plunging. As a result, the market lost about eight billion rupees over the week, as the market capitalisation dropped to Rs 89.02 billion from the previous closing of Rs 96.94 billion last week.

According to Nepse, a total of 191,760 units of shares were traded through 1,246 transactions this week, against last week’s trading of 183,434 shares from 1,917 transactions. Of the listed 54 companies for share trading, 40 companies saw their transactions this week.

The weekly trading report shows that commercial banks group suffered a gigantic loss of over 49 points, which demolished the overall trading at the Nepse floor. The group is the largest scrip at Nepse, as it comprises over 70 per cent by volume. The group, which had also lost by over 16 points last week, began trading at 437.01 points on Sunday and plummeted to 387.37 points on the closing day.

Likewise, the insurance and the development banks groups continued with the negative growth trend. The insurance group suffered a nominal loss, while the development banks group lost 2.24 points during the week.

Weekly trading of the insurance group opened at 387.84 points and closed at 387.68 points, while the development banks group began at 290.22 points on Sunday and dropped to 287.98 points on the closing day. On other hand, the finance group managed to register a marginal growth and closed at 263.35 points from the opening 263.31 points on Sunday. The other group gained 4.15 points during the five-day trading, as its index closed at 407.03 points on Thursday. The group, which had lost seven two points last week, began its trading at 402.88 points on Sunday.

The manufacturing group, the trading group and the hotel group, meanwhile, saw no cha-nge in their index and rema-ined constant at 303.65 points, 148.11 points and 180.77 points throughout the week.

Despite a huge fall, the commercial banks group continued to dominate the Nepse floor by capturing a lion’s share of the total transactions. It cornered 74.14 per cent share. The other group followed it and stood second with 12.06 per cent.

In terms of maximum number of transactions, Nepal Share Markets Company Ltd topped the race with 333 transactions.