The flood of Initial Public Offerings (IPOs) by various financial institutions diverted the investors’ attention from the secondary market to the primary market and pulled Nepse down by 8.71 points to 951.62 points this week from last week’s closing of 960.33 points.
The sole secondary market, Nepal Stock Exchange Ltd (Nepse), had been steadily registering a growth since couple of weeks and was inching towards the 1000-point.
The IPOs, this week, put the brakes on growth and the market opened in the red.
In its five-day session in a week, Nepse ended in negative territory for first three days, Sunday, Monday and Tuesday.
The contribution of the companies listed under Acategory also declined this week to 56.98 per cent, whereas last week the contribution was 69.99 per cent in the total transaction.
The sensitive index - an index of the A-category companies — also dipped by 3.53 points to 250.41 points from last week’s closing of 253.94 points.
On Sunday, the secondary market opened in the red and posted a loss of 13.21 points to 947.12 points. Similarly, on Monday it plunged by 5.03 points to 942.09 points. On Tuesday also, the Nepse dipped, though marginally, by 1.17 points to 940.92 points.
Unlike last week, this week the secondary market ended in the green zone for only two days — Wednesday and Thursday — among the five-day session. On Wednesday it bounced back by 7.64 points to 948.56 points.
On Thursday, it flared up by 3.06 points to close the weekly trading at 951.62 points.
In terms of monetary value, Nepal Credit and Commerce Bank (with Rs 100.05 million), Nepal Bangladesh Bank (with Rs 92.33 million), Nepal Share Markets and Finance (with Rs 86.51 million), Nepal Investment Bank (with Rs 48.53 million) and Everest Bank (with Rs 30.55 million) are this week’s top five gainers.
Also, in terms of numbers of share units traded Nepal Credit and Commerce Bank topped the chart with 2,46,000-unit of its shares being traded this week while Nepal Share Markets and Finance topped the chart in terms of number of transactions with 373 in its kitty.
This week 83 companies — unlike last week’s 78 companies — of the total listed companies saw their shares being traded at the sole secondary market. But the transaction amount is 7.48 per cent less than last week’s.
Except finance companies’ group, all other groups including commercial banks, insurance firms, development banks, hydropower and hotel groups ended in negative territory this week.
Commercial banks, development banks, hydropower, hotel and insurance groups lost 15.06 points to 979.64 points; 13.55 points to 1170.72 points; 9.42 points to 1241.78 points; 6.03 points to 371.27 points and 14.23 points to 852.23 points, respectively. But finance companies’ group registered 25.20 points growth to 1081.87 points from last week’s closing of 1056.67 points.
Nepse, this week, also held its annual general meeting where it decided to reduce the number of directors on its board.
Globally, the capital market is considered the economic barometer of the country.
But Nepse, at present, does not reflect Nepal’s economy. Though, Nepse is bringing a new Listing Regulation, it has to encourage more real sectors to be listed and traded to make it a mirror of economy.
Nepse also plans to start Right Shares Renounce and increase the criterion to be listed in A-category in its attempts to develop the secondary market.
Source: THT
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