Low investors’ confidence due to uncertain political scenario coupled with over supply of shares, low liquidity and poor economic performance pulled the Nepse today to over six years low.
The market plunged by 6.04 points to 336.73 points today from the morning’s opening of 342.77 points making it lower than on April 25, 2006, when the Nepse was at 338.54 points.
The increasing selling pressure due to nearing closing has dragged the Nepse down, according to Share Brokers Association Nepal’s newly elected president Anjan Poudyal.
All the subgroups — except insurance companies — ended in the red zone today.
Chilime Hydro shed Rs 38 per unit share — due to its primary issue that started today — while Arun valley lost Rs 14 per unit of its share to pull the hydropower subgroup by 12.08 points to 528.89 points in a day’s trading.
Similarly, Nepal Telecom lost Rs 7 per unit share to drag the others subgroup by 8.22 points to 464.12 points.
Laxmi Bank gained Rs 34 per unit, but Standard Chartered Bank Nepal lost Rs 62 per unit share, Nabil lost Rs 50, Nepal Investment Bank lost Rs 29 and Nepal SBI Bank lost Rs 25 per unit share to pull banks subgroup by 7.66 points.
Bishal Bazar lost Rs 56 per unit share, and Unilever lost Rs 110 per unit to drag manufacturing subgroup by 5.71 points to 498.46 points.
The day witnessed a total 1,695 transaction of 78,545 unit shares amounting to Rs 22.51 million.
The transaction amount has come down to almost half to Rs 9.86 billion in the fiscal year 2009-10 from a year ago’s Rs 16.98 billion. “It is a decline by over 41per cent, whereas there is a decline of 53 per cent in an average daily transaction,” said share analyst Rabindra Bhattarai, who opined that the country’s economy has also not supported the secondary market.
The number of listed companies has increased from 169 to 204 in a year but the phenomenal increase in the supply of shares could not boost the confidence of investors. There is also lack of liquidity in the market, he said, adding that in five years the number of shares has increased by 400 per cent but the number of investors has not increased. “The investors instead are opting to exit from the market due to rising interest rates in the banks.”
Similarly, 11. the year on year Nepse declined by 16.1 per cent to 373.20 points in mid-April 2011 against 444.76 in the same period last year. The decline in share prices was on account of significant increase in the supply of securities.
The year-on-year stock market capitalisation also decreased by 3.9 per cent to Rs. 331 billion, in mid-April 2011.
The market movement
April 25, 2006 -- 338.54
August 31, 2008 -- 1175.38
May 4, 2011 -- 338.86
May 31, 2011 -- 336.73
Sebon new site
KATHMANDU: Securities Board of Nepal (Sebon) has started www.sedfar.gov.np, a website that enables the listed companies and other securities business person to submit their financial reports via internet to the regulator. "To access the service of that site the listed companies need to acquire user identification and password from Sebon," it said, adding that the website is supposed to make the information flow faster and more efficient.
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