KATHMANDU, May 27: Nepal Stock Exchange (Nepse) gained by 3.58 percent or 14.28 points to close at 412.87 points on Sunday, the first day of the week´s trading, as investors remained optimistic about the country promulgating new constitution.
Nepse had to impose circuit breaker, halting trading for 30 minutes, on the day after the benchmark index increased by over 4 percent of the earlier close at the beginning of transactions.
All trading sectors gained values on the day, with Others sector topping the list.
But analysts caution the gain is not sustainable. “Investors are putting money based on speculation. This will ultimately put their investment in risk,” stock analyst Rabindra Bhattarai said. “Given the present scenario in the capital market, we can´t expect Nepse to go up beyond 370 points.”
Referring to declining profit and non-performing assets in banks -- the heavyweight players in the secondary market, Bhattarai said the Nepse index will to around 370 points after a few days.
Nanda Kishore Mundada, former president of Nepal Stock Brokers Association (NSBA), echoed Bhattarai and said market speculation has been dominating investors sentiment. “Nepse index has increased amid hope of political consensus even though interest rate in margin lending is still high and listed companies are reporting drop in profit. These are not favorable indicators for stock market growth,” added Mundada.
The sub-indices of Others and Hydropower groups increased by 23.49 percent and 21.64 percent to close at 588.63 points and 667.7 points respectively. Similarly, Banking and Manufacturing sectors also gained 17.6 points and 6.54 points to close at 395.17 points and 673.72 points respectively.
Similarly, Development Bank, Finance and Insurance sectors also saw their sub-indices go up by 2.24 points, 0.21 points and 1.96 points to settle at 272.78 points, 272.2 points and 500.63 points respectively.
A total of 291,931 units of shares worth Rs 107.37 million changed hands through 1,510 transactions on Sunday. Market capitalization -- total worth of listed shares - reached Rs 389.89 billion, up from previous close of Rs 376.41 billion.