NEPSE DIPS BY DOUBLE DIGIT ON INVESTORS’ CAUTIOUS TOWARD SYSTEM

Sharesansar, 12th August:

The only secondary of Nepal, Nepse, made a massive fall of 18.73 points following wait and watch behavior of investors.  The market index came to settle at 1021.86 level.

 The market had made nearly 13 percent rally in month of July only. So, it is inevitable for any capital market to make correction after making such a hefty gain within short span of time.

However, many attribute the recent correction in market because of weak confidence of investors’ towards the system.

One of the investors says, “The current clearing and settlement system of CDS is mess. Before, we use to get settled by 10 working days, however, now we have to wait beyond that period because of which we are facing difficulties in liquidity position and maintaining portfolio.”

He further adds, “If system is not capable of executing its functions properly then why would anyone invest in such scenario, where timely payment is not sure.”

Furious by such scenario, many investors are currently in wait and watch mode for any improvement in system before making further investment plan.

Following massive transactions of more than Rs 500 million on prior weeks, the work load has tremendously increased in clearing department of CDS, so they are finding it difficult to execute the necessary function in provision period.

However, brokers, who also have to deal with paper works, are not as lucky as CDS because they get suspended when delayed.

Today too, Broker numbers 4, 5, 6, 7, 13, 19, 21, 26, 28, 29, 32, 40, 47 and 58 were suspended due to non-settlement of cash and papers.

“When we delay any paper works or cash, we get suspended. But when it comes to delay in CDS, nobody is taking any action,” says one of the brokers.

Buoyed by such chaotic scenario in Nepse, the turnover of the market shrunk to Rs 306.87 million.

As for the movement of sub-groups, all landed in red. Insurance and Hydro led the downfall with losses of 64.23 points and 50.02 points respectively.

Hotels followed with 35.99 points decline, and Banking, Development and Finance decreased by 23.09 points, 12.29 points and 0.04 point respectively.

All in all, the scrips of 127 companies were traded, out of which 19 scrips gained, 18 remained intact and 90 scrips lost.

Nagbeli Microfinance Development Bank Ltd. (NBBL), closed at Rs 755, was the best performer today with gain of Rs 68 or 9.90 percent. Whereas, Nepal Community Development Bank (NCDB), closed at Rs 161, was the worst performer today with Rs 16 or 9.04 percent loss.

Chilime Hydro power Co. (CHCL), closed at Rs 2540, had the highest turnover among the traded shares. Altogether, 12,332 units share of CHCL were traded through 98 transactions worth Rs 31,244,390.

The broker with the highest standalone dealing of the CHCL was Broker No 45 (Imperial Securities Co .Pvt. Limited) with 15.32 percent totaling 3,784 share units amounting Rs 9,578,131 via 18 transactions, which includes one matching transaction of 100 units worth Rs 253,500.