Weekly share update : Commercial banks pull Nepse index down

Kathmandu, July 28:

The warning of the central bank helped stabilise the overheated stock market this week as bullish Nepal Stock Exchange (Nepse) index only posted a marginal 0.18 points growth.

Though the hydropower and insurance groups continued their better performance, the fall in share prices of the commercial banks — the major market driver — pulled the Nepse index down.

The continuous bull trend has stopped after two months and the index gained a marginal 0.18 point, against previous weeks’ double digit growth.

Nepal Rastra Bank (NRB), in its annual Monetary Policy, has stated that the economic fundamentals don’t support the current growth in the share prices.

The country’s sole secondary market that opened at 687.65 points on Sunday closed at 687.83 points on Thursday. The market escalated to a new high on the second day and touched 695.68 points but started dropping from the third day with 695.38 points and 689.80 points on the fourth day before closing at 687.83 points on Thursday.

Despite repeated warnings from the regulatory authority and the analysts, the market had overheated mainly due to ‘rumour-driven trend’, expectation of rights and bonus shares and also manipulation, particularly in the share prices of commercial banks.

The weekly turnover has also slightly decreased this week to Rs 392.4 million with 591,776 unit shares having been traded through 2,270 transactions, against the last week’s figure

of Rs 393.5 million through the trading of 506,943 shares.

Out of the total 89 listed companies in the stock exchange, 59 companies saw their transactions this week.

The group wise share trading analysis shows that major groups except commercial ban-ks registered growth. The hydr-opower, insurance, finance and hotel groups each registered growth this week, while development banks and trading group suffered a marginal loss.

The commercial banks group, which is the largest scrip by volume, suffered a loss this week, as the group’s index dropped by 5.51 points. The group’s index settled at 774.04 points from the opening 779.55 points. The group had registered an impressive double-digit growth last week.

The development banks and the trading groups are also the losers this week, as their indices dropped to 534.54 points and 162.03 points. The development banks group opened at 535.40 points, while the trading group began at 161.19 points.

On the other hand, the hydropower group registered an impressive growth of 31.53 points to close at 998.44 points. The group, which had gained a whopping three-digit growth last week, has begun its trading at 966.51 points this week.

Likewise, the insurance group, too, managed a double-digit growth of 23.50 points.

The group’s trading that opened at 631.18 points on Sunday went up to close at 654.68 points on the last day.

The finance group’s index also registered a growth of 2.94 points and closed at 476.83 points while the hotel group gained 1.54 points and closed at 259.35 points. Of these two, the finance group began its trading at 473.89 points, while the hotel group opened at 257.81 points.

The manufacturing and the other groups, meanwhile, remained constant at 348.63 points and 818.12 points thro-ughout the week.

National Hydropower Company Ltd outshone all others in terms largest trading in share units and monetary value for the week, as a total of 237,260 unit shares of the company were traded at Rs 57,079,590. Siddhartha Bank Ltd stood first in terms of number of transactions.

The Nepse floor remained open for five days, where the shares of Nabil Bank, Standard Chartered Bank, Himalayan Bank, Nepal SBI Bank, Everest Bank, NIC Bank, Bank of Kathmandu, Machhapuchhre Bank, Kumari Bank, National Hydropower Co, Chilime Hydropower Co, Sanima Development Bank and Gurkha Development Bank were traded throughout the week.