KATHMANDU: Nepal Stock Exchange (Nepse) index shed 4.13 points this week to close at 1,518.12 on Thursday — the last trading day of the week. The stock market observed a marginal fall this week after posting continuous growth over the past many weeks, setting new records.
While many analysts interpret the fall in benchmark index as a reflection of disappointment of stock investors toward the budget presented by the CPN-UML led government last Saturday, others contend that correction was due to ‘profit booking’ mentality of investors. There are also some investors who are suspicious of foul play in the market due to leakage of budget before it was formally tabled in the parliament, giving an upper hand to some investors.
Nagarik, the sister publication of this daily, had reported that some investors received information beforehand on the insurance sector programs included in the budget. This prompted those investors to trade insurance stocks based on such information and benefit from the insider information. The parliament has formed a committee under legislator Ramesh Lekhak to investigate into budget leakage.
The sudden fall of Insurance sub-index by a whopping 144.46 points this week also indicate such unfair trading, an investor told Republica preferring anonymity. Earlier, the share prices of the insurance companies was rising at an exponentially high rate, driving the benchmark index up by triple-digit last week.
Insurance sub-index had gone up by a whopping 225.96 points last week. However, stock brokers say that many investors are now mulling over selling their shares to make profit. “The market remained largely stable this week. After the continuous rise in share prices in the bullish market, some investors seem to be tempted to sell their shares to cash in on the surge in their share price. They have found this the right time to sell their stocks. This has pulled the market down marginally,” Anjan Raj Poudyal, former president of Stock Brokers Association of Nepal (SBAN), said.
Analysts also said that the budget has failed to cheer investors. “While there are not any programs related to the development and modernization of capital market, the budget also failed to convince most of the investors that the economic growth target and inflation, among others, is realistic to achieve,” said another stock broker.
Along with Insurance group, the sub-index of Banking, the heavyweight trading group in the secondary market, also went down 11.06 points to settle at 1,396.8 points this week. The Development Bank sub-index also ended 18.48 points lower at 1,513.41 points. Finance group also shed 3.9 points to close at 723.87 points.
Manufacturing and Processing, and Hydropower groups, however, continued their gaining streak this week. Their sub-indices rose by 159.78 points and 149.53 points, respectively, to close the week at 2,313.34 points and 2,500.5 points. Hotels group also ended 42.66 points higher to close at 1,920.68 points. ‘Others’ group also posted gains of 12.92 points to settle at 201.38 points. Trading group, however, remained unchanged at 201.38 points. A total of 10.3 million units of shares of 148 companies worth Rs 5.95 billion were traded in the market this week through 27,634 transactions.
