Nepse at five-year high of 806.82 points

Nepal Stock Exchange (Nepse) index marched to five-year high of 806.82 points on Wednesday, gaining 35.62 points, or 4.62 percent, compared to Monday. Market had remained closed due to public holiday on Tuesday.

The benchmark index had climbed to 806.9 points on November 13, 2008. However, the benchmark index went on a freefall after that plunging to 292.31 points on June 15, 2011.
Though investors are putting more money on the stock market, some are taking Nepse´s bullish trend with caution.

Nepse Spokesperson Shambhu Prasad Panta suggested the investors to take Nepse´s gaining streak with caution. “Rather than analyzing the performance of company, many investors are putting money on stocks based on rumors and gossip,” Panta added.

Stock analyst Rabindra Bhattarai said only the investors making wise decision can reap benefit. “Nepse index is increasing gradually and bank loans are becoming increasingly accessible,” Bhattarai said, adding that the bullish trend will continue until and central bank comes up with strict measures to mop up liquidity and regulate lending against stocks as collateral.

Rajkumar Timilsina, acting president of Nepal Investors´ Forum, attributed bullish trend in Nepse to factors like easy availability of loans and positive political developments in the country. “Investors have diverted their investments to the secondary market in anticipation of better returns compared to other sector,” he added.

However, Gunanidhi Bhusal, managing director of Aryatara Investment and Securities, does not see any specific reason behind the recent growth in Nepse index. “The psychology of investors has fuelled the market growth that picked up after the Constituent Assembly (CA) polls,” he said.

Nepse clamped circuit breakers thrice on Wednesday as well. The third circuit breaker was enforced at 1:33 p.m, after the benchmark index rose by 5 percent, suspending trading for the entire day. Nepse had clamped the first circuit breaker at 12:24 a.m. and the second one at 12:49 p.m.

A total of 919,913 units of shares of 98 companies worth Rs 404.6 million changed hands through 1,636 transactions in just 48 minutes of trading on the day.

Hydropower group was the biggest gainer of the day with index gaining 69.24 points to close at 1,831.09.

The Banking, Hotels and Development Bank sub-indices went up by 45.87 points, 16.31 points and 7.14 points to settle at 831.66, 1,100.64 and 430.54.

Likewise, the Finance, Insurance and Others sub-indices were also up 6.23, 33.97 and 35.24 points to close at 326.21, 1997.51 and 822.38, respectively.- SSN