Nepse plunges below 300 points

KATHMANDU, MAR 30: 

Despite the government's assurance and the positive economic indicators, the share market today closed at a nine-month lowest to 298.89 points.

The benchmark index — Nepse — which had plunged below 300 points within 15 minutes of the beginning of trading had been hovering over 300 points for the last two weeks due to low investor confidence. Shares of Nepal Telecom (NT) is going through its dividend adjustment phase after its book closure causing the stock market to take a dip due to its greater weightage.

Nepal Telecom which is going to distribute 45 per cent dividend witnessed a loss of Rs 6 per unit share pulling the subgroup index down by 7.05 points. NT's market capitalisation is worth 24 per cent of the total market capitalisation making it the largest puller of the index. The loss of Butwal Power by Rs 9 per unit share also brought down hydropower subgroup by 4.07 points. 

The nominal gains of commercial banks and insurance companies were not enough to compensate for the loss. The market saw a transaction worth Rs 17.2 billion through trade of 99,061 unit shares in 1,109 transactions of 83 companies. The index had surged a little almost a month back due to the possible entry of institutional savers but the possibility was not realised, further disappointing investors. 

The High Level Financial Coordination Committee had asked institutional savers like Employees Provident Fund and Citizen Investment Trust to invest in stocks to revive the listless market. Moreover, the Insurance Board is also planning to direct insurance companies to invest a certain portion of their portfolio in secondary market securities.

However, after the plunge, investors have requested the government to create a mutual fund and asset management company immediately in order to rescue the market in case it goes too low. They have also asked the government to introduce negative declaration of income source while purchasing shares. Investors have submitted a memo to Nepal Rastra Bank to direct banks and financial institutions to include listed securities in their investment portfolio to tackle the current over supply of stocks.

Source: THT