Govt policy fails to boost secondary market confidence
ShareSansar, July 31:
Jashma Sainju
The budget and monetary policy seem to have failed to boost secondary market confidence as Nepse could not save itself from plunging on the week following the monetary policy announcement. The share market lost 13.43 points tumbling to 363.14 points from 376.57 of last Thursday — the day monetary policy was announced. Though, the monetary policy did not offer direct incentive for share market but had relaxed cash reserve ratio infusing liquidity to the financial system that could translate into lowered interest rate boosting the securities market.
However, it did not show any enthusiasm in the market like it showed after the budget announcement. On the first day — after the budget — share market has gone haywire forcing the Nepse to stop trading using circuit breakers.
But, the magic of budget that had attempted to ease liquidity in the financial market seem to have waned by the second week.
On Sunday morning the market opened at 376.57 points that went down to 365.42 points by the closing time. Next day also it went further down to close at 360.14 points. Tuesday followed the slid to 357.32 points. But on Wednesday it shook off the continued slide by surging to 363.81 points. However, on the last trading day of the week on Thursday, share market again went down to close the week at 363.14 points.
As major commercial banks’ share prices plunged, banking subgroup lost 17.1 points, whereas Hydropower subgroup plunged by 70.5 points due to Chilime Hydropower that lost Rs 25 on a unit share.
Nepal Telecom’s share prices also dipped by Rs 6 per unit pulling the others subgroup by 7.05 points down. Development banks, finance companies and insurance companies went down by 4.39 points, 3.06 points and 5.44 points, respectively. Hotels also lost 5.28 points in the week’s trading.
The market observed 634,108 unit shares of 110 companies worth Rs 122.9 million being traded through 4,210 transactions in the five regular trading days. The trading volume also declined to 87.01 per cent compared to a week ago’s bumper trade.
The sensitive index measuring performance of Class ‘A’ companies went down by 3.19 points reaching 90.26 points. Among the total transactions, the trading of blue chip shares of class ‘A’ companies consisted of 62.38 per cent amounting to Rs 76.6 million. The float index that indicates the performance of the actual shares traded throughout the week also saw decline of 1.23 points to 30.74 points.
Bank of Kathmandu topped the charts in terms of transaction amount Rs 19.3 million trading. But in terms of number of transactions, Bishwa Bikas Bank was front runner with 257 transactions and in terms of numbers of shares traded National Hydro Power topped the chart by trading of 249,170 unit shares this week.
Bank of Kathmandu (Rs 19.34 million), National Hydropower (Rs 10.17 million), Chilime Hydropower (Rs 8.27 million), Standard Chartered Bank (Rs 7.96 million) and Nepal Investment Bank (Rs 6.32 million) were the top five shares being traded.
