Central Bank spooks investors with delay in Monetary Policy

- Rajesh Khanal, Kathmandu

Jul 13, 2019-

The central bank spooked investors with its decision to delay publishing the much-awaited monetary policy last week which resulted in the Nepal Stock Exchange (NEPSE) plunging 11.95 points.

 With only three days left in the current fiscal year, it remains to be seen if Nepal Rastra Bank will publish the monetary policy.

Along with the market index, the average daily turnover also declined to Rs526.66 million last week from Rs533.93 million in the previous week.

The market which opened at Rs1,260.50 points on Sunday fell 4.45 points to close at Rs1,256.05 points. On Monday, the market declined 8.7 points, followed by a gain of 2.92 points on Tuesday.

The market again dropped 1.12 points and 0.6 points on Wednesday and Thursday respectively. Eventually, the overall index plunged 0.95 percent during the review period.

Stock analysts said the investors were in wait and watch mode with the delay in the announcement of the monetary policy. “Even though banks have reported strong liquidity position due to notable rise in deposit amount, the central bank’s delay in announcing the monetary policy has left investors worried,” said a stockbroker on condition of not disclosing their identity.

 The sensitive index that measures the performance of Group A companies also went down 3.14 points to close at 268.33 points. 

 Overall, investors lost Rs14.23 billion in the book value of their investment portfolio, after the market capitalisation closed at Rs1,554.36 billion from Rs1,568.59 billion.

Except for finance companies and hydropower, the indices of the remaining nine groups plunged during the review period. Life-insurance posted heavy losses, plunging 113.16 points to close at 5,963.9 points.

Among the losers, non-life insurance witnessed a drop of 81.7 points while the index of manufacturing went down by 40.15 points. Hotels, microfinance and ‘others’ also 23.94 points, 17.68 points and 11.43 points respectively. The NEPSE of commercial banks dropped 8.64 points, development banks dropped 5.02 points and trading dropped 1.35 points.

Of the gainers, the market index of finance companies and hydropower were up marginally by 3.35 points and 0.2 points.

Regarding the individual companies, Civil Bank observed transactions of its promoter shares worth Rs175.36 million, the largest in the segment. It was followed by Nepal Bank Limited, general shares of Civil Bank, promoter shares of Prabhu Bank and Mega Bank Nepal.  

 Last week, stocks worth Rs2.63 billion were traded, which was 1.5 percent less than the amount in the previous week. The total number of traded shares also plummeted to 11,387,516 units from 16,100,063 units.

NEPSE listed 6,449,522 units of primary shares and one million units of debentures during the review period.

Companies                                                    Types of shares                               Units

Infinity Laghubitta Bittiya Sanstha                       IPO                                          2,074,000

National Life Insurance Company                        Bonus                                      3,577,132

Suryodaya Laghubitta Bittiya Sanstha                 Bonus                                       323,190

Gurans Life Insurance Company                         Bonus                                       475,200

Sunrise Bank                                                 Sunrise Debenture 2080                 1,000,000


Published: 14-07-2019 08:00

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