Share market bull overrides political chaos

KATHMANDU, DECEMBER 26

The mid-week buying spree offset the initial panic selling in the secondary market, although the profit-booking of the last trading day capped the gains. Subsequently, the index of Nepal Stock Exchange (Nepse) inched up 0.30 per cent or 6.11 points week-onweek in the trading period between December 20 and 24.

“The recent developments in the political front have dampened investor sentiment, but with attractive returns and lack of other investment avenues, investors continue to flock to the share market, but they have become more cautious now as evident by the drop in daily turnover and trading volume in the recent days,” said a market analyst.

Opening at 2,032.52 points, the benchmark index had slumped by a massive 96.88 points, as Prime Minister KP Sharma Oli recommended dissolution of the Federal Parliament during an emergency Cabinet meeting on Sunday morning.

President Bidhya Devi Bhandari then subsequently approved the proposal, causing a massive sell-off in the share market, as panicked investors sought to offload their holdings in anticipation of a looming political chaos.

However, the bull overpowered the bear over the next three days, with the Nepse index gaining 30.33 points on Monday and surging by a whopping 95.46 points on Tuesday. The benchmark index recorded an all-time intra-day high of 2,127.22 on Wednesday, but as the optimism could not last, it managed to add only 7.04 points by the time of closing.

The profit-booking on the last trading day of the week, however, weighed on the local bourse, causing Nepse index to lose 9.83 points to end the trading week at 2,038.63 points.

The sensitive index, which measures the performance of class ‘A’ stocks, edged up by 0.21 per cent or 0.82 point to 386.77 points. The float index that gauges the performance of shares actually traded rose by 1.25 per cent or 1.73 points to 139.65 points.

Altogether, 61.03 million shares changed hands through 299,904 transactions that amounted to Rs 34.72 billion in the review week. The weekly turnover was 15.39 per cent higher than the preceding week when 259,203 transactions of 56.37 million shares worth Rs 30.09 billion had been undertaken.

Only four subgroups landed in the green territory in the review period, but investors’ preference of banking stocks resulted in the market rally.

Banking surged by 3.63 per cent or 54.15 points to rest at 1,547.42 points. In terms of points gained, however, life insurance topped the chart, jumping 446.08 points or 3.36 per cent to 13,704.18 points.

At other end of spectrum, others landed at the bottom, with the sub-index plunging by 5.71 per cent or 94.94 points to 1,568.44 points. But microfinance lost most number of points — 132.08 — or 3.93 per cent to 3,225.11 points.

Meanwhile, Nepal Life Insurance Co Ltd (NLIC) topped the chart in terms of number of transactions and weekly turnover, with 17,679 transactions that amounted to nearly Rs 4.70 billion.

NIC Asia Bank Ltd (NICA) recorded second-highest weekly turnover of Rs 2.05 billion, Nepal Reinsurance Co Ltd (NRCL) had third-highest turnover of Rs 2.03 billion, Nabil Bank Ltd (NBL) had fourth-highest turnover of Rs 1.67 billion and Prabhu Bank Ltd (PBL) had fifth-highest turnover of Rs 1.13 billion.

NRCL with 17,055 transactions, Mountain Energy Nepal Ltd with 14,804 transactions, NICA with 11,443 transactions and PBL with 8,519 transactions rounded up the top-five companies with highest number of trades.

Nepal Credit and Commercial Bank Ltd was the forerunner in terms of trading volume, with 3.12 million of its shares changing hands, followed by PBL with 3.07 million shares, NICA with 2.61 million, NLIC with 2.05 million and Mega Bank Nepal Ltd with 2.03 million.

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