Nepse up by 22.95 points, highest single-day gain in 6 months

Nepal Stock Exchange (Nepse) on Sunday surged 22.95 points-the highest single-day gain in the last six months-to close at a 68-month high of 927.56 points. The level was last seen on October 16, 2008, when the market had hit 933.97 points. As Nepse’s bull run continues, stockbrokers see the benchmark index soon surpassing its lifetime high of 1,175 points, which was seen on August 31, 2008.

The brokers attributed the rise in the market to increasing demand for commercial banks shares, especially Standard Chartered Bank Nepal (SCBN). On Sunday, the price of SCBN shares rose 10 percent to reach Rs 2,376, following which the transaction was halted for rest of the day.

Stockbrokers said rumours that SCBN was increasing its paid-up capital prompted investors to buy the bank’s shares, pushing up the price massively. However, sources say the bank neither any immediate plan to increase its capital base, nor it has submitted any such plan to the central bank.

“Investors are attracted towards companies that could increase capital by issuing bonus shares,” said Narendra Raj Sijapati, president of Nepal Stockbrokers’ Association.

Helped by surging SCBN, the commercial bank sub-index rose 34.54 points. Sijapati, the surge in the index of a group that is a market heavyweight pushed up the overall market.

Prahlad Kumar Oli, managing director of Pragyan Securities, said investors were also hopeful that the budget for the next fiscal year would adopt policies to boost the capital market. “Stakeholders are expecting the budget will introduce policies that could affect the stock market in the long run,” he said. Oli however, said the market could slow down marginally, with the fiscal year nearing end. “Selling pressure could rise during this period as most of the investors who have taken loans from banks have to clear their interest by the end of the fiscal year,” Oli said.

Source : eKantipur