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NEPSE plunges at two months low

By Aashish Vermaa on Nov 14,2017 - 10:17

It hasn’t been the best week for investors, as NEPSE slumps by 62.08 points. The market opened on this Sunday, Nov 5, at 1522.81 points and since then has lost 104.88 points in a span of 5 days, closing at 1460.73 points.

Similarly, the sensitive index fell by 12.85 points or 4.02 percent to 306.79 points and the floating index dropped by 4.64 points or 4.24 percent to 104.88 points in the week.

The benchmark index had opened at 1522.81 points on Sunday and went down well under 1500 points to close at 1496.46 points. The market was constantly low throughout the week. Falling from 1496.46 points to 1493.42 on Monday, to 1484.45 points on Tuesday, dropping to 1466.62 points on Wednesday and finally to 1460.73 on Thursday. The last time NEPSE fell under 1500 points was on Sept 3.

Limited demand and excess supply of shares have led to falling in the index, says market analyst and investors.

Ishwari Rimal, chief executive officer at Nepal Stock House, said that “The current trend can be attributed to the huge flow of rights and bonus shares of companies while the demand side is sluggish, which has resulted in a negative impact on the market,” he added “With the elections fast approaching, investors are retracting from the market, I think they are in a wait and see mode at present.” He also indicated that the market may go down even more in the upcoming weeks.

Nawaraj Subedi, chairman of Nepal Stock Market Investors Association, said that “The capital base of financial institutions has increased. Investors were left unimpressed by the first quarter reports of the banks, which has been reflected in the capital market.” He said the first quarter results of banks and financial institutions haven't been encouraging enough for the investors and thus has led the market to fall.

The sub-index of commercial banks dropped by 55.05 points in the week. The share price of Nabil Bank fell by 7 % to Rs 1,130 per unit and Everest Bank by 7.14 percent to Rs 1,105 per unit.

Similarly, sub-index of development banks fell by 4.53 percent in the week. The share price of development banks like Kankai plunged by 7.84 percent to Rs 188 per unit.

Insurance sector dropped by 4.98 percent to 7,974.51 points in the week. Where the Rashtriya Beema Company fell by 6.37 percent to Rs 16,620 per unit.

The hotel sector too showed a drop of 5.88 percent or 135.89 points. Similarly, the manufacturing sector fell went down by 48.10 points or 1.97 percent. Microfinance also lost 79.76 points or 4.39 percent. The hydropower sector fell by 45.91 points or 2.51 percent in the week. And sub-index of finance sector sank by 2.61 percent or 20.20 points.

A total of 6.59 million shares worth Rs 2.53 billion were traded during the week, through 29,013 transactions. Despite Prabhu Bank topped with the highest trading volume of 1,77,000 shares, Standard Chartered Bank had the highest total turnover of Rs 115.5 million. Followed by Nepal Life Insurance Company with Rs 93.73 million, Nepal Investment Bank with Rs 88.81 million, Everest Bank with Rs 79.11 million and Nepal Telecom with Rs 77.89 million.

Tags -  NEPSE , NEPSE Falls down , Two months low