Stock index down as share prices take beating
KATHMANDU, MAY 12:
While Nepal Bank Ltd’s massive transactions on the eve of its rights issue drove up transaction volume, investors this week — May 5 to 10 — distanced themselves from engaging in share trading fearing the market would further plunge.
The index slipped by 6.61 points as share prices took a beating for the third consecutive week. Last week’s dip below 490 points has scared investors about an imminent bearish trend.
The market saw huge transactions of Nepal Bank Ltd (NBL) as the book closure day approached on May 9. To increase the bank’s paid up capital and make its net worth positive, NBL is issuing 36.1 million units of rights shares at 1:9.5 ratio with a face value of Rs 100 to existing shareholders. Shareholders can subscribe 9.5 unit shares for each unit they own.
The bank’s share price that had reached Rs 1295 in January had been declining steadily before book closure; the stock reached Rs 532 per unit. However, on the day after the book closure it took a deep plunge resting at Rs 145.
NBL’s shares worth Rs 235.5 million were traded in 1077 transactions this week. The high volume transaction of Nepal Bank also pushed total trading volume at the stock exchange up by 82.21 per cent. Nepse’s trading floor observed trading of 2.5 million unit shares of 113 companies worth Rs 511.4 million in 5374 transactions. Last week, transaction volume stood at Rs 286.7 million.
Nabil Balanced Fund I topped in terms of number of shares traded with trading of 1.15 million units in its debut week.
As newly listed scrips dominated transactions, share trading of blue chip stocks belonging to class ‘A’ companies comprised of 26.86 per cent of total transaction, amounting to Rs 137.2 million. The sensitive index that measures the performance of blue chip stocks went down by 1.82 points. Likewise, the float index that shows the performance of actual shares traded also declined by 0.41 points to 34.84 points.
The market that had opened at 492.85 points on Sunday afternoon reached 487.95 points by the time the market closed that day. The next day, it slipped to 481.81 points as share prices kept tumbling.
However, on Tuesday, the index surged to 490.44 points, following the capital market regulator’s assurance that promoter shares will not be flooding the market anytime soon. But it was not sustainable and the index kept slipping in the next two days reaching 486.24 points by the end of the week.
This week also, share prices of insurance and hydropower companies suffered the most. The insurance subgroup slipped by 20 points as Nepal Life Insurance’s share price went down by Rs 45 along with a plunge in the share price of other companies. Butwal Power Company and Chilime Hydropower lost Rs 15 and Rs seven per unit, respectively, and the hydro subgroup slumped by 11.42 points.
Nepal Telecom’s share price declined by Rs five that pulled down the others subgroup by 5.88 points.
The banking subgroup declined by 7.99 points as shares of commercial banks took a beating. Hotels, finance companies and development banks also went down by 0.21, 0.77 points and 0.66 points, respectively.
Manufacturing was the only subgroup that registered a gain of 0.28 points. This week, the top five
companies in terms of turnover were Nepal Bank (Rs 235.57 million), Prime Commercial Bank
(Rs 26.40 million), Everest Bank (Rs 20.36 million), Chilime Hydropower Company (Rs 19.23 million) and Global IME Bank (Rs 17.30 million).
Source: THT
