Nepse down 9 points as political situation

Friday - 16th October, 2015 | www.myrepublica.com | General News

Nepal Stock Exchange (Nepse) index fell 9.41 points this week to close at 1,134.47 points on Thursday -- the last trading day of the week.

While some analysts are interpreting drop in the benchmark index this week as an unwelcoming response to the newly elected Prime Minister KP Sharma Oli, others attribute it to the losing charm toward the market due to the festival season.
"Though investors' sentiment was already weakened by the Tarai turmoil and India's undeclared economic blockade, they were expecting a consensus government to bail the country out of this current political crisis," Puroshuttom Panday, an investor, told Republica. "But the formation of majority government under the CPN-UML Chairman Oli by putting Nepali Congress in the opposition has dashed investors' hopes."

CPN-UML Chairman Oli was elected as the Prime Minister on Sunday with the support of UCPN (Maoist) and Rastriya Prajatantra Party Nepal and other fringe parties.

However, Bashu Raj Dahal, another stock market investor, says the Prime Minister's election has nothing to do with the fall in the Nepse index. "The rise and fall of stock depends on performance of a company and external economic forces. Investors are disappointed at present as Nabil Bank and Everest Bank Ltd did not provide returns as per their initial capital plan submitted to Nepal Rastra Bank," Daahal, referring two performance of two major banks of the Banking group - the heavyweight trading group in the market.

Anjan Raj Poudyal, a stock broker, said investors are on 'wait and watch mode'. "This is the festival season. While sellers may not get cash immediately to celebrate festival, buyers are in no mood to buy the shares immediately due to the political situation of the country," added Poudyal.

Insurance Group was the biggest loser of the week as its sub-index dived 62.32 points to close at 4,792.74 points. Manufacturing and Processing, and Banking groups also ended 31.7 points and 12.11 points lower, respectively, ending the week at 1,859.16 points and 1,068.39 points. Sub-indices of Hotels and Development Bank also shed 10.39 points and 8.78 points, respectively, to settle at 1,823.48 points and 940.9 points. Finance group also saw its sub-index go down by 0.13 point to finish at 563.78 points. Hydropower and 'Others' groups, however, went up by 13.89 points and 7.05 points, respectively, to close at 1,995.24 points and 763.64 points. Trading group remained unchanged at 207.97 points.

A total of 2.18 million units of shares of 152 companies were traded in the market this week through 4,754 transactions. The market remained opened for trading only for three days due to public holidays on Monday and Tuesday.