Kathmandu, Sept 2, 2019:
Due to the dispute that has continued between the government and share investors regarding which method to adopt to calculate the capital gains tax (CGT), investors seem to be losing confidence to invest in the country’s secondary market. As a result, the local bourse was down for the sixth straight week in between August 25 and 29.
“Though both government and investors have stuck to their demands, government should have shown some flexibility and responsibility too to get the issue settled as soon as possible,” said Prakash Rajhaure, an independent share market analyst.
He further added that investors are losing confidence due to which the trading volume, number of share transactions and other major indicators at Nepse are in the red zone in recent times. “The environment at present is not conducive to invest in secondary market.”
“I think government needs to resolve CGT issue as quickly as possible and until this happens market will remain southbound,” Rajhaure mentioned.
The Nepal Stock Exchange (Nepse) index dropped in the review week, falling by 1.37 per cent or 16.65 points. Sensitive index also fell by 0.93 per cent or 2.46 points to 261.25 points and float index fell by 1.39 per cent or 1.24 points to 88.06 points.
The weekly turnover, however, increased by 5.1 per cent as compared to previous week to Rs 1.62 billion. In previous week, the market had witnessed transactions worth Rs 1.54 billion. Trading volume, though, fell to 6.02 million stocks changing hands this week from 6.10 million in the previous week.
Trading of mutual funds’ shares also plummeted by 17.26 per cent compared to previous week to Rs 4.84 million. In previous week, mutual funds had witnessed turnover of Rs 5.85 million.
The secondary market had opened on Sunday at 1,213.07 points and dropped by 3.45 points by end of the trading day. The market again fell by 6.49 points on Monday. However, it rose by 4.87 points the next trading day. The local bourse again dipped by 10.26 points on Wednesday and descended by 1.33 points on Thursday to close the week at 1,196.42 points.
In the review week, only the trading subgroup recorded gains. It rose by 1.07 per cent or three points to 282.13 points.
Meanwhile, the life insurance sub-index was the biggest loser of the week, plunging by 3.70 per cent or 211.17 points to 5,491.79 points. It was due to the share price of Nepal Life Insurance falling by Rs 35 to Rs 829 and Asian Life Insurance going down by Rs 13 to Rs 326.
Similarly, hydropower plummeted by 3.19 per cent or 33.46 points to 1,014.57 points, due to share price of Upper Tamakoshi Hydropower declining by seven rupees to Rs 248. Likewise, non-life insurance fell by 2.53 per cent or 120.54 points to 4,638.63 points as share price of Everest Insurance fell by eight rupees to Rs 312.
Manufacturing sub-index too dipped by 1.76 per cent or 45.13 points to 2,515.51 points. Meanwhile, others subgroup fell by 1.49 per cent or 10.41 points to 685.90 points and mutual funds sub-index dipped by 1.21 per cent or 0.12 point to 9.78 points.
Hotels sub-index went down by 1.05 per cent or 21.43 points to 2,001.27 points and banking subgroup descended by 0.91 per cent or 10.03 points to 1,087.92 points. Microfinance was down 0.40 per cent or 6.14 points to 1,510.75 points. Similarly, the development banks sub-index fell by 0.31 per cent or 5.07 points to 1,583.91 points and finance subgroup inched down by 0.23 per cent or 1.38 points to 580.69 points.
In the review week, Rural Microfinance Development Centre (Promoter
Share) was the leader in terms of weekly turnover with Rs 105.47
million. It was followed by Prabhu Bank (Promoter Share) with Rs 102.16
million, NIC Asia Bank with
Rs 97.32 million, Nepal Bank with Rs 72.23 million and Kumari Bank with Rs 69.30 million.
In terms of weekly trading volume, Kumari Bank was the forerunner with 342,000 of its shares changing hands. It was followed by Nepal Bank with 224,000 shares, NIC Asia Bank with 218,000 shares, Prabhu Bank with 191,000 shares and Rasuwagadhi Hydropower with 175,000 shares.
Meanwhile, Rasuwagadhi Hydropower topped in terms of number of transactions with 3,648 transactions. It was followed by Sanjen Jalavidhyut with 3,593, NIC Asia Bank with 1,002, Upper Tamakoshi Hydropower with 981 and Kumari Bank with 710 transactions.