Nepse biggest one-day gain in a month

KATHMANDU, JUN 26 -

The Nepal Stock Exchange (Nepse) on Tuesday rose 4.96 points to settle at 493.89 points. This is Nepse’s highest single-day gain in the last one month.

The rise in the benchmark index has been attributed to the possibility of banks and financial institutions (BFIs) issuing rights and bonus shares to raise their paid-up capital. The Nepal Rastra Bank (NRB) is likely to direct BFIs to increase their paid-up capital through the monetary policy for the next year in order to minimise the risks in the sector.

As per the existing provision, commercial banks have to maintain a paid-up capital of Rs 2 billion, while the requirement for development banks and finance companies are Rs 640 million and Rs 200 million, respectively.

Stock analyst Rabindra Bhattarai also said the growth in the Nepse index was due to a possible NRB’s move to raise the paid-up capital requirement for BFIs. “Investors are investing in BFI stocks in expectation that they would issue rights and bonus shares,” he said.

Commercial banks rose 6.6 points, while development banks and finance companies posted gains of 0.37 and 0.24 points, respectively. Others group saw its sub-index increase by 8.22 points.

Also, banks have minimised their follow-ups asking investors to service their margin loans, according to Bhattarai. “In addition, low shares prices have also encouraged investors to put money in stocks,” he said.

Stockbroker also attributed the growth in the Nepse index to a possible hike in BFIs’ paid-up capital requirement. “We’ve heard that the NRB governor on Tuesday directed bankers in this regard. As a result, the BFIs indices surged in last hours,” said a stockbroker.

Of the 45 listed companies that posted gains on Tuesday, 38 were BFIs. The market witnessed a turnover of Rs 108 million from the transaction of 578,673 shares.

Source: The Kathmandu Post