Laxmi Capital News
Internal wrangling weighs on investor sentiment

Share market investors seem unimpressed by thenews of a stable government with strong majority being formed in the countryafter a long time as the Nepal Stock Exchange (Nepse) index recorded a loss ofmore than one per cent in the trading week between December 10 to 14.

Along with theNepse index, the sensitive and the float indices also fell in the reviewperiod. The sensitive index dropped by 3.02 points or 0.93 per cent to 320.65points and the float index fell by 1.53 points or 1.39 per cent to 108.89points.

The benchmarkindex had opened at 1,536.54 points on Sunday and fell to 1,530.49 points bythe time of closing for the day. The market continued the trend on Monday anddecreased to 1,527.75 points. Similarly, the secondary market fell to 1,510.21points on Tuesday. Meanwhile, the local bourse recovered some of the loss byrising to 1,520.74 points on Wednesday. However, it dipped again on Thursday toclose at 1,520.15 points for the week.

Investors andstock market analysts pointed out that the market has been affected due tointernal reasons rather than external issues like political affairs and others.

“The issue ofvalue added tax (VAT) in share transaction was one of the prime reasons thataffected the investors’ psyche, and the capital market plunged despite positiveexternal environment,” a broker said, seeking anonymity.

The TaxpayersService Office Tripureshwor had written a letter to three brokerage firms topay their outstanding VAT, which drew immediate backlash from the brokeragecompanies.

Meanwhile,Nawaraj Subedi, chairman of Nepal Stock Market Investors Association, said themarket volatility can also be attributed to some technical reasons rather thanexternal factors, and that the trend may continue for the next few days.

“Though thecentral bank is saying there is sufficient liquidity in the market, banks andfinancial institutions are not being able to provide loans. Investor sentimenthas also taken a hit as the interest rates have gradually started to rise,”Subedi said.

He furtherinformed that with the real estate sector reviving, a number of investors haveshifted their focus on purchasing property.

In thesecondary market, the sub-index of commercial banks plunged by 13.22 points orone per cent to 1,295.78 points. Share price of Himalayan Bank dropped by 3.78per cent to Rs 840 per unit and that of Century Commercial Bank fell by 1.82per cent to Rs 216 per unit.

Along withcommercial banks, sub-indices of other financial sectors — development banks,microfinance, insurance and finance — also plunged during the review period.The sub-index of development banks fell to 1,748.23 points, down 33.23 pointsor 1.86 per cent. Likewise, the microfinance group descended by 29.29 points or1.56 per cent to 1,845.48 points. The sub-index of insurance fell to 7,894.84points, dropping by 233.81 points or 2.88 per cent and the finance group shed4.74 points or 0.62 per cent to 760.4 points.

Similarly, thesub-index of hotels descended by 59.26 points or 2.69 per cent to 2,146.25points and hydropower group fell to 2,056.83 points, descending by 39.20 pointsor 1.87 per cent.

Meanwhile, themanufacturing sector ascended by 84.12 points or 3.45 per cent to 2,523.01points. Similarly, the others group rose by 19.38 points or 2.19 per cent to902.91 points in the week.

Trading wasthe only group to remain stationary at 205.24 points in the week.

Altogether,5.8 million shares of 179 companies worth Rs 2.93 billion were traded through23,727 transactions during the week. The traded amount was 61.54 per centhigher than the total weekly turnover of the previous week.

StandardChartered Bank Nepal secured the top position in terms of total turnover withRs 433.68 million. It was followed by Global IME Bank with Rs 159.32 million,Butwal Power Company with Rs 125.66 million, Nepal Telecom with Rs 125.1million and Rastriya Beema Company (Promoter) with Rs 106.91 million.

Global IMEBank topped the list in terms of trading volume, with 482,000 of its shareschanging hands and Standard Chartered Bank was the forerunner in terms ofnumber of transactions — 3,616.

Source: TheHimalayan Times, 17th December, 2017

 

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