Market Watch

Nepse lost Rs 290b in two months

Published by Octron on January 28, 2010

Nepal´s capital market lost around Rs 290 billion in the past two months, thanks to declining share prices contributed by protracted liquidity crunch and rising interest rates in banks. Total market capitalization — total worth of listed shares in secondary market – at Nepal Stock Exchange (Nepse) dropped significantly to Rs 101.80 billion on Wednesday, compared to Rs 390.98 billion recorded on November 30, 2009.

Share analysts said liquidity shortage in the market and soaring interest rates in banks have discouraged investors from putting money in the stock market and subsequently dragged the market capitalization down.

“Given the grim situation, no investor is ready to put money in the stock market. We expect the situation to further worsen if the liquidity shortage doesn´t improve immediately,” said Nanda Kishore Mundada, president of Nepal Stock Brokers´ Association.

The benchmark Nepse index fell by 0.39 percent or 2.01 points to close at 511.7 points at the end of Wednesday´s trading. Banking, the key trading group in the secondary market, shed 0.89 points to close at 485.67 points. The sub-indices of Development Bank and Hydropower groups also lost 5.59 points and 4.51 points to close at 566.93 points and 797.03 points respectively. Similarly, Finance and Others group dropped 6.9 points and 2.35 points to close at 504.66 points and 563.97 points respectively. However, Insurance group gained 0.84 points to reach 575.39 points at the end of the day´s trading.

A total of 63,017 units of shares and 59 scrips worth Rs 30.9 million changed hands through 954 transactions on Wednesday.

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