Nepse gains 46 points

KATHMANDU, Aug 18:

Nepal Stock Exchange (Nepse) index continued its gaining streak on Monday as the benchmark index jumped by a whopping 45.55 points on Monday to close at 1,157.6 points.

This is the second straight day that the Nepse index logged double-digit gains.

Despite banda called by various disgruntled parties, buying pressure was so high in the secondary market that Nepse had to clamp circuit breaker twice.

The stock market is on a bull-run for the past few weeks after Nepal Rastra Bank (NRB) announced a new policy that requires bank and financial institutions (BFIs) to raise their minimum paid-up capital significantly within two years.

Stock brokers say investors are after stocks of BFIs which are likely to offer cash dividends. The benchmark index is 17.78 points short of touching the all-time high of 1,157.6 points which was set on August 31, 2008.

The market is on course to set a new high in the same month after seven years. "This is the season when listed companies publish their financial results. Such results give investors a picture of the companies that they are looking to invest so that they can reap benefits announced in the following months. This is the time when the market generally goes up if the market fundamentals are good," Priya Raj Regmi, president of Stock Brokers Association of Nepal (SBAN), told Republica. "This time the central bank's decision to hike paid-up capital requirement has encouraged investors to pour their money into stocks of BFIs, which accounts for two-third of the listed companies in the secondary market."

Market analysts also attribute recent political developments as another factor that has boosted investors' confidence. "Recent political developments indicate that the constitution will be promulgated soon. It has encouraged investors to put more money into stocks," added Regmi.

Daily turnover is also on the rise in recent weeks which suggests that more money is flowing into the stock market. Daily turnover on Monday rose to Rs 825.57 million, compared to average daily turnover of Rs 25 million in 2013/14.

All trading groups, except 'Trading', logged gains on Monday.

Source: Republica