KATHMANDU, August 5:Nepal Stock Exchange (Nepse) index jumped up 17.3 points this week to close at 1,660.58 points on Thursday -- the last trading day of the week.
The stock market is rebounding in recent weeks as deposit is swelling in bank and financial institutions (BFIs), who were earlier facing shortage of lendable funds, say analysts. Rise in the government spending in the last month of the last fiscal year, which concluded in mid-July, year has pumped cash into the banking system.
The shortage of lendable fund has sent the interest rates up, leading to slowdown in the flow of funds toward the stock market.
While there has not been any correction on interest rates yet as many bankers are still unsure whether the growth will sustain, investors hope that they may get less margin calls from the BFIs when lending position normalizes.
The benchmark index logged gains on all trading days, except Thursday when it shed 2.16 points.
“There has been high growth in deposits of BFIs in recent weeks and their liquidity is in a comfortable position. It has given hope to investors that the situation will normalize soon,” Gunanidhi Bhusal, managing director of Aryatara Investment and Securities Pvt Ltd, told Republica. “Also, listed companies, particularly BFIs, are publishing their annual financial results. This also caused stock prices to rise,” said Bhusal.
Bhusal predicts that the stocks could rise for a month when listed companies announce their dividend and returns.
All trading groups, except Insurance, observed gains this week. Hotels group was the biggest gainer of the week as its sub-index climbed up 162.07 points to close at 2,525.35 points. Manufacturing and Processing group ended 68.84 points higher at 2,751.46 points. The sub-indices of Finance and Development Bank groups went up 64.13 points and 48.01 points, respectively, to end the week at 818.13 points and 2,087.71 points. Hydropower group also gained 33.57 points to close at 1,959.21 points. 'Others' group went up 15.61 points to conclude the week at 708 points. Banking, the heavyweight trading group, also ended 10.61 points higher at 1,438.96 points. Insurance group, however, fell 141.65 points to settle at 9,452.4 points. 'Trading' group remained unchanged at 214.11 points.
A total of 10.58 million units of shares of 167 companies worth Rs 5.25 billion were traded in the market this week through 44,488 transactions.
Nepal Grameen Bikas Bank Ltd registered the highest turnover (245.7 million) this week, while Laxmi Value Fund-1 topped the listed securities in terms of number of traded shares (1.74 million). Nepal Life Insurance Company Ltd remained at the top of the list of companies in terms of number of transactions (2,556).
Rights shares of Mission Development Bank Ltd, Janata Bank Nepal Ltd, Tourism Development Bank Ltd and Tinau Development Bank Ltd have been listed for trading in the Nepse this week.