KATHMANDU, JUL 08 -
The Nepal Stock Exchange continued to remain firm around 375 points for the fourth straight week although past trends show increase in selling pressure as the fiscal year-end approaches. Investors usually offload their holdings at the end of the fiscal year to repay loans to banks and financial institutions (BFIs).
Last week, the benchmark index rose 2.78 points to close at 377.39 points. The market, which opened at 374.51 points on Monday, fell slightly on Tuesday, before registering growth in following days.
Groups representing commercial banks, hotels, others, hydropower companies, insurance companies and finance companies gained 3.06, 0.60, 5.87, 9.45, 4.38 and 1.19 points, respectively. The Development banks’ sub-index was the lone loser (down 1.320 points), while manufacturing industries and trading firms remained intact.
Experts say the market is ‘very stable’ at present and will improve further in coming days. The government measures adopted to boost the capital market are working, they said. “The government’s nine-point decision has helped restore investor confidence,” said Anjan Raj Poudyal, president of the Stock Brokers’ Association of Nepal.
The Ministry of Finance’s nine-point decision includes, allowing banks and financial institutions 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.
The central bank has already issued directives, allowing BFIs to disburse share purchase loans against the guarantee of stock brokers, while the Securities Board of Nepal (Sebon) has also cleared the way for stockbrokers to offer such guarantee. “Now investors are waiting for BFIs to act in this direction,” said Poudyal. “If BFIs start providing share purchase loans, it will immediately increase investment. Probably, they will start extending such loans from the next fiscal year.”
Last week, the market also saw improvement in the volume of transaction. The exchange registered a total transaction worth Rs 305.13 million — up 76.24 percent compared to previous week’s Rs 173.13 million. This figure also suggests market stability, according to stockbrokers.
Bank of Kathmandu posted the highest individual turnover of Rs 72.77 million as well as the highest number of shares traded — 248,311 units. Everest Bank’s shares were traded for the highest number of times - 402 transactions.
Source: http://www.ekantipur.com/2012/07/08/business/stock-market-continues-to-remain-firm/356800/
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