Daily average turnover at Nepse doubles

KATHMANDU, JULY 06:

The average transaction volume at the share market has more than doubled as stocks have performed well in comparison to previous years.

The average daily turnover of Nepal Stock Exchange (Nepse) since the beginning of the current fiscal year till mid-June stands at Rs 90.2 million. The average daily turnover in fiscal year 2011-12 stood at Rs 44 million, while in the previous fiscal year it was at Rs 28.9 million.

In the last 210 days of trading since mid-July 2012, 68.2 million units of shares worth Rs 19.1 billion were traded. In the entire last fiscal year, 41.8 million shares worth Rs 10.27 billion were traded.

Though the market has hit a stationary mode at 500 points since a couple of months, it has not disappointed investors like in the previous few years. The benchmark index that reflects the performance of shares has appreciated by 35 per cent in the last one year.

Share prices that are on the ascent have attracted investors into buying and selling shares. More investors are entering the market bidding higher prices for shares and investors who were hanging on to shares in the hope of better prices since the lull also released their shares causing the transaction volume to rise.

Average daily turnover was near Rs 95 million in corresponding period of fiscal 2008-09 — year the Nepse index started to tumble. “It is nature of market that during an upward trend more shares are traded than during a bearish one,” said share analyst Rabindra Bhattarai.

Moreover, opening of margin type lending based on brokers’ guarantee by Securities Board of Nepal also helped fuel transactions in the market. Sebon, NRB and Finance Ministry have allowed financial institutions to provide loans to investors when the share transfer is in a blank transfer state.

Source: THT