Nepse rebounds; investors still sceptical

KATHMANDU, APR 15 -

The Nepal Stock Exchange (Nepse) responded positively to the progress in peace process, gaining a whopping 17.05 points last week.

The Nepal Army on April 10 took control of Maoist People Liberation Army’s cantonments as per the special committee’s decision.

The benchmark index closed at 319.95 points on Thursday from Sunday’s 302.90 points. Except hotels and trading and manufacturing groups, all other groups posted gains in their indices.

Investors, who have announced protests from Sunday demanding government measures to revive the market, are hopeful with the latest political development, but are not convinced that the rise will sustain. “We are hopeful but not confident,” said Prakash Rajaure, general secretary of Nepal Securities Investors’ Association.

Rajaure said the latest political development may not be enough to restore investors’ confidence in the capital market. “Lack of funds for investment is the main problem now and it is necessary that the central bank open the door for share purchase loans,” he said.

Similar is the view of Raj Kumar Timilsina, general secretary of Nepal Investors’ Forum. “The latest surge in Nepse may not be permanent like in the past, and the progress on political front may not be enough to make the surge sustainable,” he said.

Investors have made it clear they would not call off their protests despite the positive development in the market index. They are launching a signature campaign, seeking a number of measures from regulatory bodies, including the opening of share purchase loans from banks and financial institutions and removal of income source disclosure provision for stock investment.

Last week’s surge in the Nepse index was also reflected in the market capitalisation that reached to Rs 301.93 billion from previous week’s Rs 285.40 billion.

Bank of Kathmandu realised a turnover of Rs 16.5 million from 239 share transactions, topping the charts in terms of both turnover and number of share transactions. As many as 56,200 shares of National Hydro were traded last week, propelling the company to the top in terms of the number of shares traded.

A total of 582,388 shares worth Rs 129.88 million were traded last week on Nepse.

TOP FIVE COMPANIES IN TERMS OF TURNOVER

Company                 Turnover (in Rs. millions)

Bank of Kathmandu    16.52

Everest Bank    10.35

Chilime Hydropower Co.    9.84

Prime Commercial Bank    7.05

Standard Chartered     7.04

SECTORS THAT WENT UP

Sector    Points Gained

Hydropower        28.43

Commercial banks        24.16

Others         11.75

Insurance companies        11.55

Development Banks        4.39

Finance Companies        0.94

SECTORS THAT WENT DOWN

Hotel         1.13

Source: Kantipur