Kathmandu, August 18: Nepal Stock Exchange (NEPSE) has plunged 14.52 points (1.17 percent) to close at 1,224.04 points last week owing to the consistent uncertainty on the issue of capital gains tax.
The market, which had opened at 1,238.56 points on Sunday, fell by 4.84 points and closed at 1,233.72 points. On Monday, the secondary market inched up marginally by 0.13 points. On the rest of the three successive trading days, the market went down by 2.78 points, 5.17 points and 1.86 points respectively.
The secondary market for the past few weeks has been reeling under the confusion regarding the calculation of the amount of capital gains tax. Both the Ministry of Finance and the Securities Board of Nepal have yet to come up with a concrete decision to fix the threshold of capital gains tax assessment.
Stocks brokers said that the investors are losing their confidence and have rushed to sell their stocks. Apart from the capital gains tax issue, the market was also affected adversely by a number of factors such as controversies over the interest spread calculation enforced by Nepal Rastra Bank and the parliamentary Finance Committee deferring the date for brokering license to the commercial banks, according to the brokers.
The sensitive index that measures the performance of Group A companies declined by 3.32 points to close at 264.69 points, mainly due to the double-digit fall in the index of a commercial bank that has the largest shares in the market capitalization.
Last week, investors lost Rs 15.82 billion in the book value of their investment portfolio, after the market capitalization declined to Rs 1,551.60 billion from Rs 1,567.42 billion.
Of 11 trading groups, indices of seven declined during the review period. Non-life Insurance posted the largest drop of 64.06 points to close at 4,894.04 points. Likewise, life insurance, hydropower, commercial banks and ‘others’ also shed double-digits points. Indices of micro-finance and development banks declined by 6.85 points and 2.34 points respectively.
Of the four gainers, hotels and trading saw their indices going up by 16.21 points and 12.41 points respectively. Similarly, finance companies and manufacturing also went up 2.52 points and 0.26 points respectively.
Of all the companies whose share were traded in the secondary bourse, Machhapuchchhre Bank recorded the largest transaction worth Rs 193.13 million. Rasuwagadhi Hydropower, Laxmi Bank, Nepal Bank Limited and Sanjen Jalavidhyut Company were among the top five companies with the largest amount of shares transactions.
Last week, stocks worth Rs1.78 billion were traded which was 18.7 percent less than the amount in the previous week. The total number of traded shares, however, increased to 7,538,130 units from 7,438,850 units.
During the review period, Nepal Stock Exchange-listed 4,156,699 units of primary shares of Surya Life Insurance and Nepal Investment Bank.
