Nepse hits 7-yr high of 1,102.39 pts

KATHMANDU, AUG 17 -

Nepal Stock Exchange (Nepse) on Sunday surpassed the 1,100-point mark for the first time in Seven years.

The last time Nepse traded above this mark was on September 2, 2008, when the benchmark index had hit 1,102.39 points.

On Sunday the market gained 23.63 points to close at 1,112.05 points. The turnover too was notable at Rs988.94 million. It biggest ever single-day transition was Rs1.30 billion on July 27 this year.

Experts say the market is poised to break its previous record of 1,175.38 points reached on August 31, 2008. Backed by surplus

liquidity with the banks, favourable political situation and the hike in paid-up capital requirements for financial institutions, the secondary market is likely to continue the bull run for the next few days, they said.

Pralhad Kumar Oli, managing director at Pragyan Securities, said an improvement in investor confidence following political consensus over constitution drafting and the central bank’s policy announcement pushed the market up.

He also attributed the rise to an increasing paperless transactions of shares. “In addition, the banks have started providing loans against the demat shares,” said Oli.

As per the directive of the CDS and Clearing, a company formed to settle transactions electronically, commercial banks have to transact their shares electronically from Monday.

Narendra Raj Sijapati, president of Nepal Stockbrokers’ Association, paperless transactions would eliminate the risks of loss of share certificates and fastens settlements, which boosted the investor confidence. “However, a number of investors feared they might not be able to sell their shares in physical form from Monday, so they rushed to sell their shares, pushing up the transaction volume,” he said.

The commercial banks’ group, the market heavyweight, led the gain. The sub-index rose 32.79 points to close at 1,054.13 points.

The stockbrokers said increasing demand for bank shares was due to the investors’ expectations that the banks would bonus and right’s shares to raise their paid-up capital to the required level.

Other gainers for the day hydropower, others and hotels.

The market, which opened at 1,088.36 points, plunged to 1,085.49 points in the initial hours , but  rose continuously thereafter.

Machhapuchhre Bank posted the biggest individual turnover of Rs118.10 million.

Nepal Investment Bank, up 100 points, was the top gainer.

The market capitalisation reached Rs1,144.98 billion.

Source: The Kathmandu Post