E-Kantipur

KATHMANDU, DEC 11 -

Continuing to show a pattern of slight fluctuations, the Nepal Stock Exchange (Nepse) last week dropped 2.13 points to settle at 320.25 points on Thursday from Sunday’s 322.38 points.

The Nepse index has been range bound for the last few weeks, hovering between 320 and 350 points.

Over the last week’s five transaction days, the market index witnessed marginal downfall every day. Groups representing commercial banks, insurance companies, finance companies and development banks shed 4.91, 6.32, 1.82 and 1.46 points, respectively, while manufacturing industries, hotels, others and hydropower companies gained 0.52, 6.78, 7.05 and 2.37 points, respectively. Trading sector saw no change in its index.

As always, banks and financial institutions (BFIs) played a crucial role in decline of the market index as all categories of FIs as well as insurance companies lost points. Given commercial banks posting decline in their net profits and insurance companies not allowed to distribute

dividend by the regulatory body, investors are expected to be cautious on making investment.

Stock analysts say the delay bringing into operation infrastructure like central depository system (CDS) and lack of cheap capital and new investors in the market is hindering the market’s recovery. “Until and unless these issues are addressed, the market will not be vibrant,” says Nanda Kishore Mundara, a stockbroker. “Lack of infrastructure and high bank interest rate are doing no good to the stock exchange.”

Last week, Nepse’s market capitalisation declined to Rs 293.72 billion from previous week’s Rs 296.10 billion.

Despite the downfall in market capitalisation and market index, the market turnover went up to Rs 220.67 million—up by 37.23 percent compared to previous week’s Rs 160.80 million.

Mundara, however, said the reason behind the high turnover these days is listing and trading of new shares of Chilime Hydropower Company. “Apart from a few, turnover of many companies is not high.”

Last week, Standard Finance Company witnessed trading of its 601,963 shares worth Rs 65.01 million, topping the charts in terms of both turnover and number of shares traded. Chilime Hydropower Company witnessed the highest number of transactions with its shares changing hands 3229 times.

Top five companies in terms of turnover (in Rs million)

Standard Finance    65.01

Chilime Hydropower Company    56.34

Bank of Kathmandu    11.68

National Hydropower Company    10.72

Standard Chartered Bank     6.45

Posted on: 2011-12-11 09:23

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