KATHMANDU, April 22: Nepal Stock Exchange (Nepse) index rose 6.73 points this week to close at 1,658.34 points on Thursday.
The stock market remained volatile this week with conflicting news reports about local election scheduled for next month. “Investors have been reacting to whatever development occurs in the political front (for the election),” Anjan Raj Poudyal, a former president of Stock Brokers Association of Nepal (SBAN), told Republica. “While positive developments regarding the election lift confidence of the investors, they tend to become nervous when they hear or read negative news reports.”
The stock market has been on a bearish trend after the bank and financial institutions (BFIs) tightened their fund and issued margin calls to investors in the wake of shortage of lendable fund in banking system.
Ultra-low interest rate due to excess liquidity in the banking system was one of the major drivers of the stock market boom. However, the benchmark index, which reached a record high in mid-July last year, started to retreat and took a bearish trend after BFIs started to raise interest rates since the start of this year. As BFIs are still struggling to find lendable fund despite hiking interest rates, they are yet to see a significant rise in their deposit base.
Most of the trading groups ended in the green zone this week. Insurance group led the gaining side with its sub-index jumping by 141.91 points to close at 8,688.07 points. Hotels group also logged gains of 48.61 points to close at 2,192.62 points. The sub-indices of Development Bank, and Manufacturing and Processing groups also went up by 22.57 points and 12.93 points, respectively, to end the week at 1,939.27 points and 2,161.45 points. Finance group went up 8.41 points to close at 761.21 points.
Hydropower group, however, shed 4.97 points to close at 1,990.3 points. 'Others' and Banking group also ended 3.76 points and 1.21 points lower to finish at 677.06 points and 1,535.87 points, respectively.
A total of 7.52 million units of shares of 154 companies worth Rs 5.18 billion were traded in the market this week through 33,831 transactions.