KATHMANDU, Oct 31: The stock market showed some vigor on Tuesday, the first trading day after 11-day Dashain holidays, with the Nepal Stock Exchange (Nepse) rising 2.55 percent to close the day´s trading at over two-year high of 447.83 points.
The last time the stock market had scaled this height was on August 16, 2010 when the benchmark index touched 453.4 points.
Tuesday´s gains at Nepse, which closed its normal trading for the festive season on October 18 at 436.7 points, were the result of renewed investor confidence on stocks of commercial banks. As a result, banking index rallied 14.81 points, or 4.03 percent, to close at 382.43 points.
“Stock prices of banks rose on Tuesday after investors started showing interest in them due to reduction in their prices,” Nanda Kishore Mundada, a stock broker, told Republica.
Share prices of banks had started taking a dip after the category ´A´ financial institutions started declaring dividends days ahead of the commencement of the Dashain festival. During this time, most of the investment had gone into shares of insurance and hydropower companies.
“But as stocks of insurance and hydropower companies started becoming expensive, investors have once again turned back to commercial banks,” Mundada said.
The daily report of Nepse shows that share prices of most of the banks with highest market capitalization had risen on Tuesday.
Stocks of Nabil Bank, for instance, gained Rs 59 on Tuesday to close at Rs 1,224. Standard Chartered Bank Nepal also added Rs 46 to its share value to end the day at Rs 1,816, while shares of Himalayan Bank and Everest Bank rose by Rs 19 and Rs 17, respectively, to close at Rs 749 and Rs 559.
Despite these gains made by the leading banks, shares of Everest Bank plunged by 16 percent to close at Rs 983 on Tuesday. This was because the bank had closed its book on October 19 -- one day ahead of the start of the Dashain vacation. This meant whoever bought shares till October 19 would be entitled to dividends the bank was distributing. “This made the stocks of the bank less attractive as even those selling shares on Tuesday would be able to lay their claims on returns the bank was extending. This eventually triggered selling spree which pulled down the prices of the bank´s stocks,” Anjan Poudel, another stock broker, said.
Turnover: Rs 39.53 million
No. of Traded Shares: 160,181
Total Transactions: 829
Market Capitalization: Rs 424.07 billion
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