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Nepse goes on a free fall to nearly 26-month low

2018-03-26

The country’s only secondary market went on a free fall in the trading week between March 18 and 22, with the Nepal Stock Exchange (Nepse) index witnessing a week-on-week plunge of 67.92 points or 5.27 per cent to settle at nearly a 26-month low.

Share market analysts attribute the market volatility to credit crunch in the banking sector, high bank rates and the new government’s delay in issuing the much-anticipated white paper on the economy.

Capitalising on the reduced rates, however, some savvy investors scooped up shares of otherwise well-performing companies. This, in turn, resulted in the weekly transaction amount surging by 32.99 per cent to Rs 1.72 billion, with 4.60 million shares of 173 companies being exchanged through 23,869 transactions during the review period. In comparison, 17,287 transactions of 3.34 million shares of 174 companies that amounted to Rs 1.29 billion had been undertaken in the preceding week.

In volatile trading, however, Nepse remained southbound throughout the week. Opening at 1,288.36 points on Sunday, the benchmark index had dropped by 9.40 points by the day’s closing. It shed 8.44 points on Monday and fell by 15.05 points on Tuesday. Owing to intense selling pressure, the local bourse slumped by 24.40 points on Wednesday and descended by 10.63 points on Thursday to close the week at 1,220.44 points.

The last time the local bourse had settled at the current level was on January 31, 2016, when it had closed at 1,220.70 points.

The sensitive index, which gauges the performance of class ‘A’ stocks, took a dive of 5.09 per cent or 13.97 points to 260.41 points. Likewise, the float index that measures the performance of shares actually traded also plummeted by 5.45 per cent or 5.06 points to rest at 87.76 points.

Trading was the only subgroup to land in the green, inching up by 0.65 per cent or 1.36 points to 209.79 points.

Insurance saw the biggest drop among the subgroups, with a plunge of nine per cent or 562.29 points to 5,684.47 points. Share value of Rastriya Beema Co tumbled by 14.72 per cent to Rs 9,125, and National Life by 12.20 per cent to Rs 1,101, among others.

With hotels like Soaltee slumping by 8.59 per cent to Rs 234, Taragaon Regency down 7.22 per cent to Rs 257 and Oriental taking a dive of 12.26 per cent to Rs 465, the hotels subgroup retreated by 8.75 per cent or 168.01 points to 1,752.24 points.

Hydropower plummeted by 7.89 per cent or 123.70 points to 1,442.99 points. Shareholders of Chilime saw the value of their stocks drop by 8.26 per cent to Rs 711 and those of Sanima Mai lost 4.60 per cent to Rs 332.

Trailing close behind, microfinance subgroup plunged by 7.45 per cent or 109.40 points to 1,359.35 points. Chhimek was down 8.43 per cent to Rs 825, Nirdhan Utthan fell by 8.45 per cent to Rs 975, to name a few.

Because of commercial banks like Nabil down 4.69 per cent to Rs 975 and Standard Chartered losing 3.02 per cent to Rs 867, the banking subgroup descended by 4.48 per cent or 51.26 points to 1,091.89 points.

Similar to banking, the sub-index of development banks also fell by 4.02 per cent or 60.59 points to 1,446.46 points. Finance declined by 3.05 per cent or 20.32 points to 646.47 points, others lost 2.81 per cent or 20.01 points to 692.76 points and manufacturing dropped by 1.91 per cent or 42.50 points to 2,184.23 points.

Akin to the previous week, Nepal Life Insurance Co topped the chart in terms of number of transactions and weekly turnover, with 1,887 transactions that totalled Rs 165.82 million. Nabil Bank with Rs 88.66 million, Citizen Investment Trust with Rs 65.10 million, Nepal Bank with Rs 58.40 million and Nepal Investment Bank with Rs 57.60 million rounded up the top five companies with highest traded amount in the review period.

Meanwhile, Nepal Credit and Commerce Bank was the forerunner in terms of trading volume, with 214,000 of its shares changing hands.

Source: The Himalayan Times