Nepse pulls back below 2,000 point threshold – The Himalayan Times – Nepal’s number 1 English daily newspaper

Kathmandu, March 4

The Nepal Stock Exchange (Nepse) index fell 53.62 points or 2.65 percent in the trading week between February 26 and March 2.

The sudden shift in relations between the recently formed coalition, followed by the resignation of Finance Minister Bishnu Prasad Paudel, the introduction of strict policies for microfinance institutions by the Nepal Rastra Bank (NRB), among others, have created additional challenges instead of from before problems. long-awaited support to the market’s growth, stakeholders say.

According to Chhote Lal Rauniyar, the immediately former president of the Nepal Investors Forum (NIF), although investors had hoped that the market would maintain a steady growth rate after the assurances of the former Finance Minister Paudel and the NRB for the development of the market after the establishment of a new government has somewhat dampened investor sentiment towards the market due to the shift in political balance due to the upcoming presidential election.

“While the NRB and the former finance minister were very positive about the market in the early stages, stakeholder demands were not addressed in the semi-annual monetary policy review, despite numerous commitments and commitments from them. of the liquidity crisis, lowering interest rates and removing the limit on margin lending were not deliberately addressed in anticipation of the political party disagreements before the presidential election,” he said.

Rauniyar also shared that the central bank’s strict policy towards microfinance institutions has weighed heavily on the market, adding that the decision was made on the spur of the moment by the authorities. “The NRB amended the ‘Unified Directives Microfinance Financial Institutions, 2022’ and tightened the disbursement of loans from microfinance companies and increased the amount to be paid into the general reserve fund by 50 percent for institutions paying an annual dividend of 15 percent, under other decisions, after it was found that some institutions are breaking the law.Instead of taking action against the guilty, the central bank has introduced policies that could negatively affect the entire industry and billions of investments from the public. political interventions, as government agencies have shown they can even overthrow the growth of an industry if they want to,” he told The Himalayan Times.

The sensitive index, which measures the performance of class “A” stocks, fell 2.81 percent, or 10.80 points, to 373.56 points during the reporting period. The float index, which measures the performance of shares actually traded, also fell 2.65 percent to 138.31 points.

A total of 22.96 million shares were traded through 171,598 trades amounting to Rs 8.43 billion during the assessment week. Weekly turnover increased by 34.39 percent compared to the previous trading week, when 17.19 million shares had changed hands through 126,516 trades totaling Rs 6.27 billion.

However, as the market was only open for three days in the previous week compared to the normal five trading days in the assessment week, the average daily turnover in the assessment week fell by 19.36 percent to Rs 1.68 billion, compared to Rs 2.09 billion. in the previous week.

The reference index had opened at 2,022.64 on Sunday and was up 4.55 points to 2,027.19 points at close before witnessing a southward trend throughout the trading week. The market fell 3.65 points to 2,023.54 points when it closed on Monday. On Tuesday, the market lost 3.61 points before falling further by 24.44 points to pull back below the 2,000 mark to 1,995.49 points on Wednesday. On Thursday, the Nepse index lost another 26.47 points to settle at 1,969.02 for the trading week.

All sub-indices except hotels and tourism ended up in the red this week.

Manufacturing and processing led the pack of losers after falling 4.93 percent to 4,703.27 points; microfinance fell by 4.30 percent to 3,739.04 points; trading lost 3.88 percent to 2,101.19 points; life insurance up 3.22 percent to 9,876.35 points; and banking fell 2.80 percent to settle at 1,297.16 points.

Similarly, the finance department fell 2.72 percent to 1,653.47 points; others fell 2.43 percent to 1,428.04 points; development banks lost 2.23 percent to 3,556.02 points; non-life insurance declined 2.15 percent to 8,687.83 points; hydropower fell 1.55 percent to 2,516.76 points; investments by 1.22 percent to 64.05 points and mutual funds lost 0.78 percent to 14.01 points.

Meanwhile, hotels and tourism rose 0.27 percent or 8.29 points to settle at 3,100.09 in the rating week.

A version of this article appears in the March 5, 2023 issue of The Himalayan Times.