Kathmandu, March 28
Nepal’s only stock market NEPSE’s index rose by 76 points on Tuesday to cross the 1600 mark again after 16 months as investors were encouraged by improved liquidity in banks and financial institutions.
Shares of 144 companies were traded during the day as Rs 1.38 billion changed hands. The stock exchange deployed its first ‘circuit-breaker’ within half-and-hour as trading was suspended for 15 minutes. When trading, the second circuit-breaker was applied when the index registered an increment of 4 per cent. Trading was again suspended for the third time when the index climbed up by 5 per cent.
According to market analysts, easing of the liquidity situation in banks and financial institutions and the government’s preparations to spend big for the elections are the main reasons why investors are putting their money in the stock market. Similarly, the NRB directive that banks and financial institutions need to maintain at least Rs 8 billion in paid-up capital by second week of April has also bouyed investors. The other factor, according to market watchers, is the opening of stock brokers’ outlets outside Kathmandu.
Banks and insurance companies were the star perfomers of the day as investors were excited by news that the companies can propose bonus shares within July this year. News that Butwal Power Company is going to issue an FPO soon has also encouraged investors.
Investors who entered the market as NEPSE hit rock-bottom of 1,250 three weeks ago have made profits of 30-40 per cent and this has helped increase confidence among those looking for investment opportunities in the country. In addition to that, 420 million units of share were added to the market Tuesday itself.
