Nepse down 9.66 points as parties fail to reach consensus
KATHMANDU, Dec 9: Nepal Stock Exchange (Nepse) shed 9.66 points, or 1.94 percent, on Sunday as chances of striking a deal on formation of a national consensus government dimmed, dampening investor confidence.
The benchmark index, which opened at 497.67 points Sunday morning, closed at 488.01 points with most of the sub-indices falling in the red zone.
“The main reason for this is politics, which is currently playing a dominant role on the stock market,” Stock Broker Anjan Poudel told Republica. “If there are positive developments on formation of a national consensus government, the stock market will start making gains again.”
An example of what Poudel said was seen last week when Nepali Congress fielded its leader Sushil Koirala as the prime ministerial candidate for the national consensus government. Following this news, the index had posted gains of 8.43 points on Tuesday and 9.41 points on Wednesday. But soon as possibilities of formation of such a government became rare, the index dipped 2.1 points on Thursday -- the last trading day of the week.
“What happened on Sunday (the first trading day of the week) on the stock market can be considered an extension of previous week´s impact, as political scenario has not changed since that time,” Poudel said.
And this caused all of the sub-indices to fall on Sunday, with banking index, which contributes to 50 percent of the total market capitalization, dipping 11.19 percent, or 2.39 percent. Hydropower index also fell 21.47 points, or 2.12 percent, on Sunday and stocks of Nepal Telecom, which contributes to around 25 percent of the total market capitalization, saw two percent erode from its value ending at Rs 652.
The biggest loser on Sunday was Shrijana Finance, with its stocks shedding 7.27 percent to end at Rs 153. Next in line was NMB Bank, which lost 5.62 percent to end at Rs 235, followed by Garima Bikas Bank, which fell 5.11 percent to close at Rs 167. Kaski Finance and Yeti Finance also lost over 4.5 percent in their stock value to end the day at Rs 102 and Rs 127, respectively.