Nepse falls as investors flee stocks

KATHMANDU, JUN 03 -

Following the dissolution of the Constituent Assembly (CA), jittery investors fled stocks, sending the share market plunging.

Putting an end to its rising trend, the Nepal Stock Exchange (Nepse) last week nosedived by 39.32 points to close at 373.55 points on Thursday. The market, which opened at 412.88 points on Sunday, dropped points the following days, before gaining a mere 0.34 points on Thursday.

Stockbrokers say a majority of investment made in the recent past was guided by the speculation that that the market would skyrocket following the constitution promulgation. “Now as it did not happen, investors are rushing to offload their holding,” said Anjan Raj Poudyal, president of Stock Brokers’ Association of Nepal. “There is immense selling pressure on the exchange now, unlike a few previous weeks.   

Last week, the entire sub indices registered loss, expect for hotel—up 55.80 points—and non-mover trading. The heavyweight, commercial banks, fell 49.53 points, while hydropower companies, others, insurance companies, manufacturing industries, development banks and finance companies registered dropped 84.92, 58.73, 10.78, 6.64, 7.90 and 1.60 points, respectively.

Stockbrokers fear that the market might again get into bearish trend. “The government’s recent measures may help revive the market if they are executed immediately,” said Poudyal.

The Finance Ministry on Thursday introduced nine measures to boost the stock market. The measures include allowing banks and financial institutions to extend share purchase loans against the guarantee of stockbrokers, starting full-fledged operation of the central depositary system within July, starting mutual funds and preparing guidelines for the entry of institutional investors.  

Last week, the market turnover also fell to Rs 240.02 million from the previous week’s Rs 372.39 million.  Bank of Kathmandu posted the highest individual turnover of Rs 63.34 million from the trading of 106,569 shares through 720 transactions.

Source: The Kathmandu Post