Nepse first double-digit dip in 7 months

KATHMANDU, JAN 21 -

The Nepal Stock Exchange (Nepse) posted its first double-digit decline in seven months, losing 12.55 points on Sunday. The benchmark index settled at 508.36 points at the end of the day after opening at 520.91 points.

The market had last seen a double-digit decline on May 30, 2012, when the Nepse index dropped 18.69 points. Then,

the market was in its upward momentum. The capital market started to decline ever since it hit four-year high of 540 points on December 27, 2012.

Experts say the existing political uncertainty, which has a major influence on the decision making of investors, pulled down both the demand and supply of stocks, and eventually the index. “The opposition parties hitting the streets against the incumbent government may have hit the investor confidence,” said Anjan Raj Paudel, former president of the Stock Brokers’ Association of Nepal. On Sunday, the hydropower sub-index witnessed

the biggest fall (down 22.19 points), followed by the heavyweight commercial banks (down 18.33 points).

Paudel said the possible decline in profits of banks in the second quarter might have also affected the stock price of commercial banks.  The Infrastructure Development Bank was Sunday’s highest individual loser — down 8.11 percent. It was followed by Swabalamwan Bikash Bank and Citizens Bank International. Kamana Bikash Bank gained the most — 6.96 percent.

With the fall in Nepse index, the volume of transaction has also declined. The market turnover decreased to Rs 55.9 million on Sunday from Rs 92.59 million last Thursday, while the number of shares traded came down to 137,176 shares on Sunday.

“Buyers are in wait-and-see mode and they quote low price, decreasing the trade volume,” said Paudel, anticipating the market to hover around 500 points over the next month.

Source: The Kathmandu Post