Investors struggle for funds to buy shares

KATHMANDU, JUNE 23:

As investible funds were claimed by primary issues, the secondary market continued with its lustreless performance this week — June 16 to 20.

The Nepse index slumped by 5.81 points as share market investors are struggling to find funds to buy shares. Moreover, the political situation remained volatile despite the announcement of election date due to the protests by the CPN-Maoist.

Mega Bank Nepal’s recently held initial public offering (IPO) and the ongoing rights issue of Nepal Bank Ltd have absorbed funds worth more than Rs 17 billion that could have been invested in the

capital market.

Likewise, the reluctance of financial institutions to lend against shares in the last month of the fiscal year due to the need to provision one per cent of the total loaned amount has further trapped

investible funds.

Thanks to Everest Bank’s bulk trading of more than 17,000 unit shares, trading volume increased by 33.2 per cent. Otherwise, the transaction volume would have been static. Nepse’s trading floor observed trading of 1.5 million unit shares of 120 companies worth Rs 398.7 million in 5077 transactions. The turnover in the market had stood at Rs 294.4 million last week.

Share trading of blue chip stocks belonging to class ‘A’ companies comprised of 64.42 per cent of total transactions, amounting to Rs 253.04 million, this week. The sensitive index, which measures the performance of blue chip stocks, went down by 1.82 points. Likewise, the float index that shows the performance of actual shares traded declined by 0.54 points to 34.99 points.

This week, the Nepse index plunged below 490 points. On Sunday afternoon, the market that had opened at 494.36 points, closed at 494.98 points. In the next four days, the index gradually crept downwards and by the end of the week, it was standing at 488.55 points.

This week, except for manufacturing, the rest of the subgroups ended up in the red. Banking was the biggest loser of the week that dipped by 7.58 points. Hotels and insurance followed closely as they lost 6.24 points and 6.84 points, respectively.

Likewise, hydropower companies, finance companies and development banks subgroups also went down by 3.65 points, 1.22 points and 1.97 points, respectively. Others subgroup also registered a loss of 5.87 points.

This week, Everest Bank topped the charts in terms of transaction volume with trading of shares worth Rs 103.02 million. Nabil Balanced Fund I topped in terms of number of shares traded with trading of 379,201 units. Commerz and Trust Bank Nepal was the forerunner in the number of transactions with 638 transactions.

The top five companies in terms of turnover this week were Everest Bank (Rs 103.02 million), Bank of Kathmandu (Rs 23.75 million), Standard Chartered Bank (Rs 22.77 million), Chilime

Hydropower Company (Rs 17.83 million) and Nepal Investment Bank (Rs 15.94).

Source: THT