Stock traders hope new rules will usher better days

KATHMANDU:

Although the political tussle continues to dampen investor sentiment, stock traders have pinned their hopes on gradual market recovery after Nepal Rastra Bank issues a new directive on loan on demat shares and insurance regulator raised the ceiling for insurance companies to invest in productive sectors, including stock market.

“We are expecting a boost in investor confidence after the central bank issues a new directive on demat loans and since insurance firms have been allowed more investment exposure,” said Narayan Ghimire, head of Citizen Investment Trust’s merchant banking unit.

According to him, lack of provision for investors to pledge demat shares to acquire loans is one of the reasons

for low participation in the market at present.

Nepal Stock Exchange (Nepse) index tumbled by 18.54 points or 2.10 per cent week-on-week to rest at 862.5 points, from November 16 to 20 primarily due to profit booking.

The benchmark index that had opened at 881.04 points on Sunday fell by 14.88 points by the day’s closing. It continued to drop on Monday and Tuesday, shedding 17.98 points and 4.12 points, respectively.

The bourse added 9.89 points and another 8.55 points over the last two trading days, however, it was unable to make up for the losses incurred in the first three trading days of the week.

During the week, there were 10,121 transactions of 2.55 million shares of 167 companies worth Rs 1.13 billion at the stock market. The transaction amount was 4.4 per cent less than the previous week when 10,899 transactions of 2.93 million shares of 167 companies worth Rs 1.18 billion had been undertaken.

The sensitive index, which shows the performance of class ‘A’ stocks, declined by 3.58 points to 184.16 points. Similarly, the float index that measures the performance of shares actually traded also dipped by 1.52 points to rest at 59.9 points.

Owing to the selling pressure, all the subgroups took a hammering during the week. Even the trading subgroup, which had remained constant at 186.61 points since September 11, retreated by 2.09 points to 184.72 points, as Bishal Bazaar Co’s share value dipped by Rs 30 to Rs 1,900.

Development banks, finance and others subgroups too managed to limit their losses to single digit, declining by 9.66 points, 2.39 points and 1.17 points to settle at 656.84 points, 478.18 points and 704.91 points, respectively.

At the other end, the insurance subgroup continued to lead the pack of losers, plunging 92.78 points to close the week at 3,793.12 points. Nepal Life Insurance’s share value dropped by Rs 115 to Rs 4,010, and that of National Life Insurance by Rs 70 to Rs 2,130, among others.

Next in line was hydropower subgroup, which slumped by 53.24 points to 2,103.8 points on the back of Chilime’s shares settling at Rs 1,515 (less Rs 39) and Ridi’s resting at Rs 473 (down Rs 22).

However, it was the loss of 21.16 points of the banking subgroup that caused the benchmark index to fall. This is because the banking subgroup has the largest stake in market capitalisation in the country’s only secondary market. With scrips of Nabil Bank down Rs 61 to Rs 1,739, and that of Standard Chartered down Rs 50 to Rs 1,730, the banking subgroup rested at 745.47 points for the week.

The hotels subgroup, which had recorded marginal loss of 6.77 points in the previous week, declined by 12.59 points to 1,884.84 points this time around. Even though the share value of Soaltee went up by Re one to Rs 600, Taragaon Regency’s share price slid by Rs 19 to Rs 281,

consequently pulling the hotels index down.

Manufacturing, the only subgroup to land in the green zone the previous week, retreated by 10.91 points to settle at 1,233.59 points as Unilever Nepal’s scrips took a beating by Rs 300 to end the week at Rs 15,400.

Chilime Hydropower topped the charts in terms of turnover as well as number of transactions, making Rs 105.28 million in 493 dealings. Other companies that rounded up the top five making highest turnover in the week were Nepal Life Insurance (Rs 71.04 million), Machhapuchhre Bank (Rs 64.7 million), Nepal Bangladesh Bank (Rs 49.77 million) and Soaltee Hotel (Rs 49.07 million).

Based on the number of shares traded, National Hydropower Co ranked first in the review period with 216,000 units of its scrips changing hands over the week.

In the week, Kalinchowk Development Bank listed one million of its ordinary shares at the stock market.

Source: THT