Nepse down after NRB concerns

KATHMANDU, DEC 24 -

The Nepal Stock Exchange (Nepse) plunged 26.47 points on Monday to close at 768.72 points.

The loss for the second day in a row came after the central bank hinted at curbs on margin loans. Market heavyweight, the group representing commercial banks, lost 38.26 percent, while the hydropower companies’ group (down 29.52 points) followed.

Hotels, development banks and others also saw their sub-indices fall, while insurance companies and finance companies were the only gainers on Monday. Anjan Raj Paudel of Thrive Brokerage House said a number of brokers were witnessing selling pressure. “Due to the central bank’s concern about rising stock prices, investors rushed to sell their stocks, resulting a fall in the stock index,” he said. The central bank has asked banks and financial institutions to furnish the status of their margin lending, expressing concerns about the massive surge in the stock index within a short period.

The market has risen more than 200 points since the Nov 19 CA polls. Paudel said the market would remain stable as a number of investors are still willing to buy shares in the event of a drop in the prices. “High transaction volume indicates there is growing attraction towards the stock market,” he said.

The market saw a turnover of Rs 466.33 million from the trading of 1,156,946 shares on Monday.

Stock market to boost capital

The Nepal Stock Exchange plans to increase its paid-up capital to Rs 300 million from Rs 200 million. It plans to issuing 2:1 bonus shares. A proposal in this regard will be tabled at Nepse’s annual general meeting scheduled for January 13. The Finance Ministry holds a 58 percent share in Nepse, Nepal Rastra Bank 35 percent, NIDC 6 percent, and stockbrokers hold the rest.

Source: The Kathmandu Post