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Credit crunch, unclear policies dampen mood

2018-07-02

Owing to credit crunch and unclear policies of the government, the Nepal Stock Exchange (Nepse) index retreated  by 1.63 per cent or 19.92 points in the trading week between June 24 and 28.

Seeking anonymity, an investor said that they have been facing a hard time availing credit from banks and financial institutions, the consequence of which is reflected in the drop in daily transaction amount in the share market.

He further claimed ambiguous and over-ambitious policies of the government have created the current problems.

“Moreover, the Securities Board of Nepal has allowed banks and financial institutions to issue further public offerings (FPOs) randomly. The price and volume of the shares under FPO should have been regulated in a scientific manner,” he further added.

The benchmark index, which had opened at 1,218.46 points on Sunday, had gained 1.35 points by the end of the day to close at 1,219.81 points. Nepse shed 9.72 points on Monday to land at 1,210.09 points and was down 15.29 points on Tuesday to 1,194.80 points.

The local bourse inched up by 4.62 points to rest at 1,199.42 points on Wednesday and dipped by 0.88 point to close the week at 1,198.54 points.

The sensitive index fell by 1.43 per cent or 3.66 points to 252.09 points. Likewise, the float index also slipped by 1.53 per cent or 1.34 points to 86.04 points.

In the review period, eight out of the 10 subgroups landed in the red zone. The finance subgroup saw a marginal gain, while the trading subgroup did not witness any transaction in the review period and remained steady at 197.54 points.

The manufacturing sub-index was the biggest loser and plunged by 3.12 per cent or 73.05 points to rest at 2,268.22 points. Share value of Unilever Nepal dropped by Rs 1,119 to Rs 25,900.

Microfinance sub-index fell by 2.73 per cent or 44.37 points to 1,579.32 points. Share price of Chhimek Laghubitta Bikas Bank descended by Rs 20 to Rs 875. The hydropower subgroup also shed 2.54 per cent or 38.39 points to land at 1,472.27 points, with Himalayan Power Partner’s share price falling by Rs 10 to Rs 288.

Insurance subgroup fell by 2.51 per cent or 155.16 points to rest at 6,020.58 points. Everest Insurance dropped by
Rs 74 to Rs 1,316. The hotels sub-index went down by 2.09 per cent or 38.69 points to 1,810 points. Oriental’s share price was down by eight rupees to Rs 515.

Meanwhile, others sub-index dipped by 1.35 per cent or 9.69 points to 705.79 points. This was due to Citizen Investment Trust’s share price going down by Rs 50 to Rs 2,441 and that of Nepal Telecom falling by seven rupees to Rs 723.

Similarly, the banking subgroup dropped by 1.21 per cent or 12.49 points to land at 1,016.74 points. The share price of Bank of Kathmandu decreased by Rs 54 to Rs 256. The development banks sub-index also fell by one per cent or 14.22 points to 1,403.85 points. Muktinath Bikas Bank was down by Rs 16 to Rs 365.

Meanwhile, finance subgroup inched up by 0.12 per cent or 0.77 point to 613.95 points, with Central Finance’s share price up three rupees to Rs 117.

Altogether, 3.67 million shares of 186 firms worth Rs 1.04 billion were traded through 15,848 transactions in the week. The traded amount was 7.25 per cent lower than total weekly turnover of previous week, which was recorded at Rs 1.12 billion. In the past week, 4.96 million shares of 190 companies had changed hands through 17,228 transactions.

In the review period, Mega Bank Nepal took the lead in all three categories — trading volume, number of transactions and weekly turnover — with 236,000 units of its shares changing hands through 996 transactions that amounted to Rs 41.54 million.

The remaining top four spots in terms of turnover were occupied by Nepal Investment Bank with Rs 30.17 million, Standard Chartered Bank with Rs 28.13 million, Nabil Bank with Rs 27.03 million and Everest Bank with Rs 26.06 million.

Source: The Himalayan Times