The first week (July 14 to 18) of the new fiscal year saw the stock
market pushing for new heights, boosting investor confidence. The full budget which was announced on schedule last week has signalled better economic conditions which helped investors regain faith in the share market. Moreover, financial institutions started providing margin financing for share purchases since the beginning of the fiscal year. In the last two months of the previous year, financial institutions had slowed down in issuing short-term loans against shares due to the need to provision one per cent of the loan in the year-end balance sheet. But with the new fiscal year, they have resumed margin financing.
Despite the increment in share prices, transaction volume declined by 11 per cent, this week. Nepse’s trading floor observed trading of 1.26 million shares worth Rs 388.8 million of 120 companies in 4224 transactions. Last week, transactions worth Rs 446.6 million had taken place.
Share trading of blue chip stocks belonging to class ‘A’ companies comprised of 50.22 per cent of total transactions, amounting to Rs 197.6 million, this week. The sensitive index, which measures the performance of blue chip stocks, went up by 4.21 points. Likewise, the float index that shows the performance of actual shares traded increased by 0.58 points to 36.34 points.
On Sunday afternoon, the market that had opened at 506.53 points, closed at 511.15 points — the day the budget was announced. The following day, the index rocketed past 518 points. However, on the first day of the fiscal year, it slumped to 509.36 points due to profit booking by investors. In the next two days, the index started to climb due to margin financing and on the last day of the week, the index reached 521.60 points.
This week, except for finance subgroup, the rest of the subgroups registered gains. The hydropower subgroup was the biggest earner of the week and gained 71 points as Chilime Hydropower Company’s share price increased by Rs 77 per unit. Likewise, Butwal Power Company also gained Rs 17 on a unit.
Major insurance companies such as National Life Insurance earned Rs 81 per unit share and Nepal Life Insurance gained more than Rs 100 per unit due to which insurance went up by 39.86 points. Likewise, debutant NLG Insurance’s price also reached Rs 302 per unit in very first week of trading.
Banking gained 18.73 points as share prices of major banks rose. NIC Asia Bank’s share price rose to Rs 669 from its opening price of Rs 504. Likewise, Everest Bank gained Rs 93 per unit among others, this week. Likewise, hotels and development banks gained 0.95 points and 3.63 points.
Similarly, thanks to Bottlers Nepal Terai, manufacturing subgroup increased by 1.77 points. The finance subgroup ended up in the red and lost 0.21 points.
This week, Everest Bank topped the charts in terms of transaction volume with trading of shares worth Rs 37.9 million. Nabil Balanced Fund I topped in terms of number of shares traded with trading of 194,694 units. Commerz and Trust Bank Nepal was forerunner in number of transactions with 318 transactions.
src THT
