Stock investors gain Rs127b this week

KATHMANDU, JUN 04

Investors gained Rs127 billion in four trading days this week, with rising share prices.

The stock market capitalisation, which had sunk to Rs 824 billion last Thursday, rose to Rs951.18 billion on Wednesday. The investors had faced losses of more than Rs100 billion in the first week after the April 25 earthquake.

Over the last nine days, the transaction volume has grown almost threefold. On May 24, the first day after the quake, transaction stood at just Rs110 million. It rose to Rs304 million on Wednesday.

Nepal Stock Exchange (Nepse) has been on the rise for the last five days after losing points for the first four days of the last week.

After falling below 900-point mark, the market has been gaining 20 points daily on an average. On Wednesday too, the market rose 23.51 points to close at 925.49 points.

Hydropower, insurance and banking sector stocks have seen healthy rise in their prices. On Wednesday, the insurance sub-index grew 155.18 points, while banking and hydropower rose 27.48 points and 66.75 points, respectively.

There are doubts of market manipulation as these three sectors have been significantly affected by the earthquake. The banks are expected to face loan recovery problems, especially from the real estate sector, while a number of hydropower projects have faced notable losses. Insurance companies, non-life insurers in particular, have been overwhelmed by the insurance claims following the earthquake. However, experts denied the possibility of market manipulation.

Narendra Raj Sijapati, president of Nepal Stockbrokers’ Association said the recent growth was due to political developments. “The market started to grow with the possibility of formation of a national consensus government. Development on the constitution drafting front too fuelled the growth,” he said.

Niraj Giri, spokesperson at the Securities Board of Nepal, ruled out the possibility of market manipulation. “However, the board along, with the Nepse, has formed a monitoring team to closely watch if there is any such possibility,” he said.

Source: The Kathmandu Post