Stock market inches up by 4.16 points

KATHMANDU, JUN 24 -

The Nepal Stock Exchange last week registered a growth of 4.16 points to close at 365.14 points on Thursday. The market had opened at 360.99 points on Sunday.

Groups representing commercial banks, hydropower companies, trading firms and finance companies gained 6.69, 16.26, 2.70 and 0.53 points, respectively. The losers were hotels (down 0.76 points), insurance companies (down 2.31 points) and development banks (down 1.44 points). Indices of manufacturing and others remained unchanged.

Having observed investor behaviour over the last two weeks, stockbrokers say the market is heading towards stability. “In fact the market can go up form here if the government’s nine-point is executed immediately,” said Anjan Raj Poudyal, president of the Stock Brokers’ Association of Nepal.

The decisions include allowing banks and financial institutions (BFIs) to extend share purchase loans against the guarantee of stockbrokers, starting full-fledged operation of the central depositary system within July, starting mutual funds and preparing guidelines for the entry of institutional investors.

However, these decisions are likely to take some time to get implemented. The central bank has already issued circular allowing BFIs to sanction the share purchase loans, but the existing Securities Businessperson Regulation 2008 only allows brokers to take and execute orders, but does not authorise them to offer guarantee.

In order to be eligible as guarantor, stockbrokers have written to the Securities Board of Nepal (Sebon) seeking necessary amendments to the regulations. Along with the stability in the index, the market also saw some improvement in the volume of transaction. Last week, total turnover on the exchange was Rs 301.85 million — up 78.08 percent compared to previous week’s Rs 169.50 million.

Stockbrokers say that the increase in market turnover also indicates that the market is heading towards stability. Investors see a rise in investment after BFIs start offering share purchase loans. “Once we start getting share purchase loans, investment increase significantly,” said Prakash Rajaure, general secretary of the Nepal Stock Investors’ Association.

Last week, Everest Bank posted the highest individual turnover of Rs 117.44 million through 1928 transactions. Similarly, Citizens Bank International topped the chart in terms of number of shares traded — 138,415 units.