Weekly share update : Nepse drops, bounces back

Kathmandu, October 13:

As Nepse reacted to new directives from Nepal Rastra Bank (NRB), trading at the Nepse floor has to be suspended for the first time in its history on Monday, Tuesday and Thursday, three days this week.

Trading at the Nepal Stock Exchange (Nepse) — the sole secondary market of the country — floor suspended twice on Monday due to fall in the Nepse index — first by 20 points and later by 25 points. It lost 25.46 points or 2.83 per cent to 873.92 points at the closing of trading on Monday from the opening 899.38 points.

Similarly, Nepse has been suspended twice on Tuesday due to decrease in its index. The Nepse lost 25.80 points or 2.95 per cent to 848.12 points on Tuesday.

According to new rule, the trading will be suspended for half an hour if the index goes down or up by 15 points or three per cent from previous day’s transactions within half an hour of the trading.

Similarly, the trading will be suspended for another half an hour, if the index goes down or up by 20 points or four per cent within the half an hour after the transaction begins. If the index continues to go down or up by 25 points or five per cent, within yet another half an hour of the transaction, the trading will be suspended for the whole day.

Rewat Bahadur Karki, managing director of Nepse hoped that the rule will stabilise the market. “Huge changes, either upward or downward, will affect the market,” he said adding that it is necessary for the sound growth of the secondary market.

Similarly, the trading was suspended twice on Thursday, the last day of the trading as the Nepse ‘unexpectedly’ bounced back. Nepse gained 28.41 points or 3.39 per cent to register 866.13 points on Thursday.

After the central bank’s directive to commercial banks on Sunday to curtail the margin lending to 50 per cent that is said to be one of the reasons of unnatural price hike, the market was expected to cool down, but Nepse tried to prove wrong by ‘unexpectedly rising’ on the last day.

The central bank has also tried to make sufficient flow of shares — as short-supply has been considered another reason in fuelling price hike — by easing rul-es for the promoters to sell their shares in the secondary market.

This week Nepse lost 33.25 points in its index to 866.13 in the weekly trading. The total number of transaction stands at 1617 and total units of shares traded throughout the week sta-nds at 7,40,764 for Rs 380.51 million. Out of the total transactions, transaction of companies under ‘A’ class occupies 53.10 per cent.

National Hydropower topped the list in terms of monetary value and Gurkha Development Bank topped in terms of number of transactions with 155 transactions this week.