Nepse rallies 40 points with formation of new government
Nepal Stock Exchange (Nepse) benchmark index climbed up 40.24 points this week to close at 1,424.95 points on Thursday--the last trading day of the week.
The stock market, which was on a downward trend, saw a sudden upswing as KP Sharma Oli was sworn in as the new prime minister of the country. Many analysts interpret the surge of stocks to the positive sentiment of investors toward the new government.
While investors were worried until now about the formation of the 'left alliance' in the eve of the elections and the announcement to unify two largest communist parties of the country, it seems the fear among investors has largely evaporated.
Earlier, the market had taken a dive when the left alliance was formed and it clinched a sweeping victory in the election. As CPN-UML Chairman KP Sharma Oli was appointed the new prime minister of the country on Thursday, Nepse benchmark index surged by double digit to cross 1,400-point level the same day.
“While every other factor that determines the market's direction has remained the same, the formation of new government could be attributed as the main driver to the stock rally,” said a broker.
A total of 3.79 million units of shares of 179 companies worth Rs 1.54 billion were traded in the market this week through 16,638 transactions.
All trading groups ended in the green zone. Insurance group become the highest gainer of the week as its sub-index rose 262.4 points and closed at 7,288.64 points. Microfinance group followed the suit. Its sub-index jumped 76.76 points to end at 1,725.74 points. Sub-indices of Hydropower and Development Bank rose 65.5 points and 64.98 points, respectively, closing at 1,8823.37 points and 1,628.83 points. Manufacturing and processing group shed 30.77 points to finish at 2,475.66 points. Banking, the heavyweight group, fell 33 points to close at 1,242.38 points. Hotels group also ended 24 points lower at 2,104.45 points. Finance group went down 12.6 points and closed at 717.76 points. Sub-indices of 'Trading' and 'Others' groups also went down 10.97 points and 9.81 points, respectively, settling at 222.96 points and 763.48 points.
Prabhu Bank Ltd topped the list of companies in terms of turnover (Rs 67.1 million) and units of shares traded (293,000 units). Nepal Investment Bank Ltd became the top company in terms of number of transactions (590).
Bonus shares of Oriental Hotel Ltd and rights shares of Jebils Finance Ltd and Guheswori Merchant Banking & Finance were listed in Nepse for trading. Similarly, Support Microfinance Bittiya Sanstha Ltd's ordinary shares were also listed in Nepse for trading.
Source: My Republica