E-Kantipur

KATHMANDU, JUL 31 -  

The Capital market saw no major fluctuation last week as the market index dropped 2.28 points in the last trading day compared to the first day. The Nepal Stock Exchange (Nepse) index came down to 363.14 points on Thursday from 365.42 points on Sunday.

Over the week, the second and third trading days witnessed decline in the market index, while the last two days saw rise that minimised the gap of the market performance.

The hydropower sector led the downfall in Nepse with its index nose diving by 36.18 points as almost all groups registered a slight decline. Groups representing insurance companies, commercial banks and finance companies and development banks too witnessed negative growth of 5.47 points, 3.15 points, 3.03 points and 1.39 points, respectively. There were no changes in the indices of manufacturing and trading groups.

Stock analysts say the market is witnessing the much needed stability over the last few weeks after it emerged from a near-crash on June 15 when the Nepse index plunged to as low as 292.32 points. They say it is high time for the market to go up. “There is a reason for hope,” said Anjan Raj Poudyal, president of Nepal Stockbrokers’ Association. “There are a lot of positive things in the pipeline such as mutual funds and central depositary system. After their official entry into the market, they will definitely lead the market to the upward direction.”

Poudyal is hopeful that the market index will hover around 350-400 points until some substantial measures are taken. Despite some key measures taken by the government and the central bank to boost the stock market, Nepe is still hesitating to witness a bullish run.

The budget for the current fiscal year reduced the capital gain tax to 5 percent from 10 percent and the central bank allowed banks and financial institutions (BFIs) to determine the extent of margin loans.

Stockbroker Nanda Kishore Mundara said the market has failed to draw attention of investor as the average return given by the listed companies is less than the interest being offered by BFIs. “To attract investors to the market, the return on investment must be at least equivalent to the interest rates in the market,” said Mundara, pointing to the need for new investors. Last week, Nepse also witnessed a decline in its market capitalisation. The market capitalisation that was at Rs 335.72 billion on Sunday decreased to Rs 323.74 billion on Thursday. Likewise, the transaction amount also declined by 87.01 percent to Rs 122.9 million compared to the previous week.

The Bank of Kathmandu topped the charts in terms of the transaction amount with a turnover of Rs 19.3 million. National Hydropower took the pose in terms of total shares traded (249,170). Bishow Bikas Bank topped in terms of the number of transaction with the bank witnessing 257 transactions.

Posted on: 2011-07-31 10:56

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