Business

Political uncertainty weighs on Nepse

Nepse-2_med.jpg

June 18

The domestic share market saw the slight recovery seen in the previous week wiped out in the trading week of June 11 to 15, with Nepal Stock Exchange (Nepse) index clocking a drop of 25.6 points or 1.58 per cent to settle at 1,589.59 points.

Opening at1,615.19 points, the benchmark index fell by 24.7 points by the day’s closing, which was the biggest one-day drop recorded during the week. Continuing southbound, the local bourse fell by 9.97 points on Monday. On Tuesday, Nepse inched up 4.63 points, but shed 0.66 points on Wednesday. The domestic share market added 5.1 points on Thursday, but the two meagre gains recorded during the week were insufficient to salvage the losses of the other three days. Consequently, Nepse settled at a two-and-a-half month low level.

The sensitive index, which gauges the performance of class ‘A’ stocks, fell by 5.51 points or 1.6 per cent to rest at 337.61 points. Similarly, the float index that measures the performance of shares actually traded also lost 1.89 points or 1.59 per cent to 117.07 points.

Share market analysts attribute the down trend to the ensuring political uncertainty. Moreover, the attractive interest rates being offered by commercial banks has also encouraged investors to divert their funds to the primary market, they said.

Consequently, the traded amount in the review period was 11.59 per cent less than the preceding week. In total, 4.91 million shares of 161 companies that amounted to Rs 2.96 billion were traded through 30,647 transactions during the week. For comparison, 34,274 transactions of 5.94 million shares of 159 firms worth Rs 3.35 billion had been undertaken in the previous week.

Among the subgroups, trading continued to remain steady at 212.76 points, while hotels was the sole subgroup to land in the green zone, ascending by 10.29 points or 0.46 per cent to 2,223.96 points.
Hydropower saw the biggest drop of 46.52 points or 2.28 per cent to land at 1,996.04 points. Shareholders of Chilime lost 2.11 per cent, with the shares of the hydropower company valued at Rs 835 when the market closed for the week on Thursday. Sanima Mai was down 2.69 per cent to Rs 1,120 and United Modi fell by 5.44 per cent to Rs 382, among others.

Trailing close behind, others subgroup fell by 15.33 points or 2.18 per cent to 688.34 points, weighed down by Nepal Telecom’s stock price reclining by 2.22 per cent to Rs 660.

Insurance slumped by 174.19 points or 2.04 per cent to 8,377.71 points. Shikhar was down 3.48 per cent to Rs 1,916, Life Insurance plunged by 3.30 per cent to Rs 2,050 and Rastriya Beema fell by 1.78 per cent to Rs 13,750.

Banking retreated by 22.55 points or 1.56 per cent to 1,423.29 points. Share price of commercial banks like Nabil fell by 2.12 per cent to Rs 1,480 and that of Nepal SBI was down 2.12 per cent to Rs 969.

Development banks descended by 22.62 points or 1.15 per cent to 1,944.42 points. Chhimek lost 3.37 per cent to Rs 1,550 and Nagbeli fell by 1.02 per cent to Rs 3,300.

Finance and manufacturing managed to limit their losses to below one per cent. Finance shed 7.51 points or 0.98 per cent to 760.50 points and manufacturing dropped by 22.03 points or 0.9 per cent to 2,411.81 points.

Meanwhile, Standard Chartered Bank retained its top position in terms of turnover with Rs 237.51 million, followed by Everest Bank with Rs 196.85 million, Nepal Life Insurance Co with Rs 112.59 million, RSDC Laghubitta Bittiya Sastha with Rs 102.61 million and Everest Insurance with Rs 100.52 million.

Siddhartha Equity Oriented Scheme was the forerunner in terms of trading volume, with 215,000 of its scrips changing hands.

Similar to the previous week, Standard Chartered Bank again topped the chart with regardto most number of transactions in the week — 3,802.