Fiscal year 2069/70 augured well for the secondary market of Nepal as its performance fared better than the last year’s.
Though the market entered the year in a battered condition, with political gloom hanging over the country following the dissolution of Constituent Assembly, several factors like margin lending, mutual fund, Central Depository System (CDS), dividend payout ratio of the companies and other factors salvaged the performance of the local bourse.
The market ended its fiscal 2069/70 run closing at 518.27, gaining 128.55 points, or 32.99 percent, over the last fiscal closing.
It was three years ago, in 2066/67, when the Nepse last traded at over 500 points. That was when the NEPSE was making a correction from the height of 1175.38, set on March 31, 2008. But the current scenario is just the reverse as the local bourse is clambering back from the plunge it took on June 6, 2011 to the lowest level of 292.32.
The NEPSE’s journey back up was accomplished through a roller coaster throughout the fiscal year.
The benchmark index ended highest on February 17, 2013 at 555.93 points, while lowest record for the fiscal year 2069/70 was set on July 16, 2012 (the opening day) at 384.92 points.
Other indicators that that point to the market’s better-than-last-year performance are its turnover and market capitalization.
Compared to the turnover of Rs 10,162 billion of preceding fiscal year 2068/69, this year the turnover rose by a hefty 98.12% to stand at Rs 20,133 billion. Similarly, the market capitalization also made a huge leap of 39.71% to stand at Rs 514,492.13 million compared to Rs 368,262.13 million in the last fiscal.
Several factors impacted NEPSE’s movements during the fiscal year 2069/70.
At the beginning of the fiscal year, the one-third budget brought through ordinance by former Prime Minister Baburam Bhattarai failed to create any positive impact in the market.
But the Nepal Rastra Bank’s approval on margin lending and loan against purchase receipt of shares ensured high liquidation in the market.
Likewise, introduction of mutual fund guideline by the SEBON paved the way for the launching of Siddhartha Growth Mutual Fund-1 worth Rs 500 million and Nabil Balanced Fund-1 worth Rs 750 million. The transactions carried out by both the mutual funds are having a positive impact in the market.
On the other hand, the slow pace in the implementation of Central Depository System (CDS) has failed to live up to the high expectation surrounding faster trading of shares aided by online infrastructure.
The most dramatic impact on the market was triggered by the consensus among political parties to form a government led by chief justice Khil Raj Regmi. The announcement resulted in the third highest turnover worth Rs 238 million on February 12, 2013, forcing a 5% circuit breaker on February 17, 2013, after nine months gap.
Again, the provision allowing offloading of promoters share directly through secondary market, technical glitches in the Nepse website and broker terminals and increase in the number of broker suspensions after failing to pay the due affected the market negatively.
Meanwhile, listing and transactions of new commercial banks like Civil Bank and Commerce and Trust Bank and other companies help drive up the trade at local bourse. Relisting and transaction of Nepal Bank Limited, listing and transaction of merged companies like Global IME Bank, NIC Asia Bank and others also played a part in turning the market on.
Last but not the least, appointment of a new General Manager at NEPSE has created a positive vibe among investors, raising hopes that long stalled projects and programs would now be implemented.
src : sharesansar
Though the market entered the year in a battered condition, with political gloom hanging over the country following the dissolution of Constituent Assembly, several factors like margin lending, mutual fund, Central Depository System (CDS), dividend payout ratio of the companies and other factors salvaged the performance of the local bourse.
The market ended its fiscal 2069/70 run closing at 518.27, gaining 128.55 points, or 32.99 percent, over the last fiscal closing.
It was three years ago, in 2066/67, when the Nepse last traded at over 500 points. That was when the NEPSE was making a correction from the height of 1175.38, set on March 31, 2008. But the current scenario is just the reverse as the local bourse is clambering back from the plunge it took on June 6, 2011 to the lowest level of 292.32.
The NEPSE’s journey back up was accomplished through a roller coaster throughout the fiscal year.
The benchmark index ended highest on February 17, 2013 at 555.93 points, while lowest record for the fiscal year 2069/70 was set on July 16, 2012 (the opening day) at 384.92 points.
Other indicators that that point to the market’s better-than-last-year performance are its turnover and market capitalization.
Compared to the turnover of Rs 10,162 billion of preceding fiscal year 2068/69, this year the turnover rose by a hefty 98.12% to stand at Rs 20,133 billion. Similarly, the market capitalization also made a huge leap of 39.71% to stand at Rs 514,492.13 million compared to Rs 368,262.13 million in the last fiscal.
Several factors impacted NEPSE’s movements during the fiscal year 2069/70.
At the beginning of the fiscal year, the one-third budget brought through ordinance by former Prime Minister Baburam Bhattarai failed to create any positive impact in the market.
But the Nepal Rastra Bank’s approval on margin lending and loan against purchase receipt of shares ensured high liquidation in the market.
Likewise, introduction of mutual fund guideline by the SEBON paved the way for the launching of Siddhartha Growth Mutual Fund-1 worth Rs 500 million and Nabil Balanced Fund-1 worth Rs 750 million. The transactions carried out by both the mutual funds are having a positive impact in the market.
On the other hand, the slow pace in the implementation of Central Depository System (CDS) has failed to live up to the high expectation surrounding faster trading of shares aided by online infrastructure.
The most dramatic impact on the market was triggered by the consensus among political parties to form a government led by chief justice Khil Raj Regmi. The announcement resulted in the third highest turnover worth Rs 238 million on February 12, 2013, forcing a 5% circuit breaker on February 17, 2013, after nine months gap.
Again, the provision allowing offloading of promoters share directly through secondary market, technical glitches in the Nepse website and broker terminals and increase in the number of broker suspensions after failing to pay the due affected the market negatively.
Meanwhile, listing and transactions of new commercial banks like Civil Bank and Commerce and Trust Bank and other companies help drive up the trade at local bourse. Relisting and transaction of Nepal Bank Limited, listing and transaction of merged companies like Global IME Bank, NIC Asia Bank and others also played a part in turning the market on.
Last but not the least, appointment of a new General Manager at NEPSE has created a positive vibe among investors, raising hopes that long stalled projects and programs would now be implemented.
src : sharesansar
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