Trading halted midway as Nepse gains over 5pc
KATHMANDU, FEB 18 -
The Nepal Stock Exchange (Nepse) imposed circuit breaker thrice on Sunday as the benchmark index surged dramatically amid news about the possible change of the government.
The trading was first halted for 15 minutes when the index surged by 3 percent. Again, a 30-minute halt was imposed following a 4 percent rise in the index. Eventually, share transactions were halted for rest of the day after the Nepse index surged by more than 5 percent.
The circuit breaker system is applicable in three stages of the index movement either way at 3 percent, 4 percent and 5 percent. In case of a 3 percent movement of the index within the first hour of trading, there will be a 15-minute market halt. If the benchmark index fluctuates 4 percent within 2 pm, there will be a trading halt for half an hour. And, in case of a 5 percent movement, regardless of the time, share transactions are halted for rest of the day.
With political parties appearing to have reached to a consensus on the appointment of Chief Justice Khilaraj Regmi as the new executive head of the country the Nepse index surged by 25.73 points to reach 555.93 points on Sunday.
Stockbrokers said the latest political development was the main reason behind the surge. “Even good financial results of commercial banks in the second quarter had not made an impact as big as the latest political development has made,” said Anjan Raj Poudel, former president of Nepal Stockbrokers’ Association.
The recent political development has come as confidence booster for investors and an increasing number of investors are willing to purchase shares. “If an election government is formed, the market is likely to go up further,” said Badri Phuyal, chairman and chief executive of Kumari Securities. “The market is unlikely to come down as long as the country heads towards the election.”
Sunday’s surge pushed the market above 550 points for the first time in over three years (38 months). On December 14, 2009, the secondary market had hit 554.54 points. On Sunday, the Nepse also registered the highest single-day gain in 33 months. On May 30, 2010, the index had moved up 26.95 points.
Stockbrokers said their offices were on Sunday full of investors seeking to purchase shares. “They were basically interested in the shares of blue chip companies — particularly commercial banks, insurance companies, Chilime Hydropower Company and Nepal Telecom,” said Phuyal.
Stock analysts say investors, however, must more focused on market fundamentals instead of political development to get better returns. “Investors can gain handsomely only when the companies they invest do better financially,” said Shambhu Pant, spokesperson for Nepse.
On Sunday, hydropower sub-index posted the highest gain of 62.05 points, followed by commercial banks — up 36.58 points. Insurance and others groups also witnessed double- digit growth in their indices.
Of total listed companies whose shares were traded on Sunday, only five faced losses. Top five gainers of Sunday were Agriculture Development Bank Limited, Nepal Investment Bank, Machhapuchhre Bank Limited, Global IME Bank Limited and NMB Bank Limited.
And, the top losers were International Leasing and Finance, Bishwo Bikas Bank, Biratlaxmi Bikas Bank, Pathibhara Bikas Bank and Subhechha Bikas Bank Limited.
Source: The Kathmandu Post
