Nepse falls 2 days in a row

KATHMANDU, MAR 24

Nepal Stock Exchange (Nepse) index lost points for the last two days despite investors’ expectations that the market would beat past records after Chiranjeevi Nepal took the helm of the central bank on Sunday. Nepal is well-known among the investors for his “pro-market” image.

On Monday, the market dropped 7.53 points to close at 956.59 points. The transaction volume too stood at a meagre Rs 186.94 million.

On Sunday, the benchmark index lost 3.5 points.

Nepse had reached to an all-time high of 1,175.38 points in August 2008, when Nepal was heading the Securities Board of Nepal (SEBON).

Stockbrokers said investors had been expecting the market to grow after Nepal’s appointment. “But the market fell. It might be due to the investors’ perception about the trend in the past,” said Narendra Raj Sijapati, president of Nepal Stockbrokers’ Association.

The market had initially rose when Finance Minister Ram Sharan Mahat, who is also known as “market-friendly”, took the helm of the Finance Ministry.

“However, the Nepse started a downward trend within a few days as investors rushed to book profits,” he said.

Sijapati, however, attributed the fall in the index to the outgoing NRB Governor Yuvaraj Khatiwada’s move to limit banks and financial institutions’ investment in shares to 1 percent.

He said the proposal that Khatiwada forwarded is at the Finance Ministry for final approval.

Anjan Raj Paudel, managing director of Thrive Brokerage House, said the majority of the investors are still expectation the market to grow with a new governor in place.

“As the market is dominated by bank and financial institutions, investors are expecting the NRB’s policies might not contradict with the norms of the stock market,” said Paudel, attributing the slow growth of the capital market to the lack of policy coordination among major regulators, including NRB, Sebon and Insurance Board.

Paudel said the fall was also due to low capital expenditure of the government. “In addition, investors’ perceptions have changed as in the past years the market used to rise on the appointment key persons at the policy level.”

Sub-indices of the majority of the trading groups, except for hydropower, plunged on Monday. The overall market capitalisation stood at Rs 981.61 billion.

Source: The Kathmandu Post