Market makes a major shift as budget introduces investment friendly policies

The market witnessed a major boost throughout the week gaining 4.69% in its index to close at 735.87 points. A market friendly budget announced on July 14 contributed to the bullish run of the week. Investor confidence has been fully revived as the government has introduced investment friendly policies such as the reduction in capital gains tax from 15% to 10% and the imminent implementation of the Central Depository System (CDS).

The Hydropower sector (+11.89) was the biggest gainer this week with substantial increases in share prices of Butwal Power Company (+Rs 170) and Chilime Hydropower (+Rs 100). Nepal Telecom´s (+Rs 52) share price made a big jump this week registering its highest market value in nine months to push up the ´Others´ sub-index (+9.20%). Most of the major commercial banks (+3.79%) performed strongly. Bank of Asia (+ Rs. 38) and KIST Bank (+ Rs. 32) registered the highest gains in the sector. Development banks (+2.60%) continued to advance from last week as most of the companies in the sector booked gains. Advancement in the market prices of United Finance (+Rs 74) and IME Financial Institution (+ Rs 50) pushed up the Finance sub-index (+1.49%). Insurance companies (+ 4.15%) also traded in the green; the biggest gainer in the sector was Nepal Life Insurance Company (+Rs 135).

Market turnover for the week was Rs 394,024,352 - a 3.06% increase over last week. The bulk trading for National Hydropower (Rs 47,343,400) continued this week. If these mutual bulk transactions are not taken into account, the market turnover increased by 11.44% compared to last week. The market witnessed a major leap this week because positive market sentiment has settled in; and the reduction in capital gains tax and introduction of CDS in October should increase the number of investors and further develop the capital market.

Source: Republica