Nepse ends the year on a positive note despite political instability
KATHMANDU, July 17: Country´s stock market recorded impressive rise of 26.87 points or 7.71 percent over fiscal year 2010/11 to close at 389.72 points, thanks to some positive economic indicators and marginal drop in lending rates of banks and financial institutions.
Nepal Stock Exchange (Nepse) index, which also measures the confidence of investors, gained value, despite lingering political instability and upheavals in stock trading.
Total transaction volume during the year increased by a whopping 54.12 percent to Rs 10.27 billion, compared to the preceding fiscal year.
“The capital market showed some positive improvements backed by lower bank interest rates and some positive indicators of the economy despite the lingering political instability,” Rabindra Bhattarai, a share analyst, told Republica.
Bank interest rate declined by around 2 percentage points to about 14 percent during the year. Similarly, economic growth also rose to 4.6 percent during the year 2011/12, up from 3.8 percent of 2020/11.
Though the government attempted to improve share trading by easing margin lending, it failed to boost investors´ confidence amid deepening uncertainty over promulgation of new constitutions in the country.
“However, a major breakthrough in integration and rehabilitation of ex-Maoist combatants pushed up the Nepse index briefly,” Bhattarai said, adding, “But differences among political parties on constitution writing process halted Nepse´s recovery.”
The benchmark index dropped the year´s low of 298.89 points of March 29. It climbed to the year´s high of 432.82 points on May 8.
Average daily transactions also increased to Rs 44.3 million during the review year compared to Rs 28.9 million of 2010/11.
Similarly, total market capitalization also went up to Rs 368 billion -- covering 23.64 percent of Gross Domestic Product (GDP) -- from Rs 323 billion of the preceding fiscal year.
During the year, the number of companies listed in the Nepse also rose by 10 to reach 216.