KATHMANDU, AUG 15 -
Banks and financial institutions (BFIs) may have filed cheerful results for the last quarter of 2009-10, but the stock market doesn’t seem to be impressed.

Almost all the BFIs whose Q4 results are out have shown a rise in their net profit. A number of commercial banks have announced dividends

and bonus shares too. However, the Nepal Stock Exchange (NEPSE) is still in a bearish mood.

Usually, at this time of the year when BFIs release  Q4 reports, NEPSE gets   energised amid hopes of dividends and bonus shares. However, NEPSE index is in a downward trend since three weeks.

Since the start of this fiscal year, the NEPSE index has lost 23.05 points. In the last three weeks, the index registered gains on only eight days.

However, share prices of even those companies that have produced good results and declared handsome dividends and bonus shares have declined. Everest Bank and Citizens International Bank have already announced dividends and bonus shares.

According to stock market experts, the difference between the rate of return from the stock investment and the rate of borrowing for stock investment is largely pulling down the stock market. Some also attribute the current state of the secondary market to the liquidity crunch.

“Due to the high rate of borrowing against the low rate of return from the investment, the share market has been going down,” said Nanda Kishore Mundada, president of

the Nepal Stockbrokers Association.

Stock analyst Rabindra Bhattarai attributes the current decline in the market to fund diversification. “Currently, the share

market is suffering from fund diversification due to the rights shares issued

by listed companies,” said Bhattarai.

Posted on: 2010-08-16 07:56

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