 |
|
| Kathmandu Friday March 29, 2002 Chaitra 16, 2058. |
|
Stock market begins to
rebound
Post Report
KATHMANDU, March 28:Investors had begun to heave
sighs of relief with the performance of the country’s only secondary market beginning
to rebound after months of continuous slide that resulted in market capitalisation losses
tuning to billions of rupees. But Wednesday’s bearish trading again gave out bad
signs.
The stock market had begun to upsurge last
week when prices of many commercial banks went up ending over three months of bearish
trading in the Nepal Stock Exchange (Nepse). The index for the commercial banks group
alone had surged by over 34 points during the week.
Since commercial banks control a lion’s
share of the total trading in the stock market, any fluctuation in its index easily
influences the overall Nepse Index. The Nepse Index last week surged by 22 points, one of
the largest weekly hikes in recent months.
The Nepse Index that stood at 186.94 on
Monday last week surged to touch 213.73 at the end of trading Monday this week. With the
signs of recovery, investors had looked forward to brighter days ahead. However, the
market on Tuesday and Wednesday slumped yet again.
Though Tuesday’s fall in the Nepse Index
was a mere 0.03 per cent, Wednesday’s fall was over 8 points pouring cold waters on
investors’ confidence again.
Experts earlier had claimed that the major
cause of the bullish outlook might be due to the declaration of dividends by a number of
banks and other companies listed with the stock exchange. Some more annual general
meetings are in the offing.
Announcement by some commercial banks to give
dividends and issue bonus and rights shares may have injected new hopes into the stock
market that looked bearish just over a week back, said a broker.
Since Monday last week, share prices of all
the financial institutions have gone up (see box). Even companies from the manufacturing
sector saw some price gains during the period.
Another reason that experts attribute to
better stock performance is the clearing of the cloud of uncertainty that shrouded the
renewal of the Nepal-India Trade Treaty. "The restoration of confidence in trade with
India may be one of the reasons why the stock market is beginning to show some life,"
an official of Securities Board told The Kathmandu Post.
Furthermore, experts have also tied the
reiteration by many countries, the latest by India, to help Nepal fight the Maoist
insurgency to the stock market upswing. The ongoing insurgency has greatly eroded
investors’ confidence, primarily due to the attacks on various business
establishments.
"Anticipating better environment ahead
for business is one of the reasons for the rebound in the stock exchange," a Nepse
official said. "Escalated Maoist attacks on business establishments had greatly
eroded the investors’ confidence," he said.
"The expectation for dividends and a more conducive
environment to business in days ahead may explain the unexpected upturn seen in stock
trading lately," says an official of the stock exchange preferring anonymity.
However, he added, "It is too early to say that the upturn will be sustainable."
Other Stories
|
