Investors lost Rs 613 billion last year due to a heavy fall in the prices of shares of listed companies at the Nepal Stock Exchange (Nepse).
According to Nepse, the market capitalization fell to Rs 2.813 trillion from Rs 3.426 trillion (18 percent drop) during mid-July and mid-April. The market was largely affected by the dwindling macroeconomic indicators, crunch in loanable funds with banks, high interest rates and political situation, said stockbrokers.
Due to a slump in trading, the overall Nepse index went down 451.18 points in the review period. The market opened at 2,385.65 points on April 17, 2022 and closed at 1,934.47 points on April 13, 2023 of the Nepali year 2079. It shows an 18.91 percent drop in the market index.
The Nepse index rose to the year’s high at 2,420.97 points on April 24, 2022, while it went to as low as 1,815.14 points on September 25. In the second half of the year, the market bounced by 119.33 points, compared to the lowest mark.
The secondary market was adversely affected by the exorbitant rate of interest throughout the year. In the first half, the deteriorating external indicators also affected the market.
Likewise, the total turnover also plunged 75 percent. In the review period, the total traded amount fell to a mere Rs 423.19 billion from Rs 1.712 trillion. The daily turnover average declined almost one-seventh to Rs 1.77 billion.
The investors of microfinance and life insurance companies lost the highest percent of their market values. While the index of microfinance declined 27.25 percent, life insurance lost 26.68 percent and non-life insurance lost 23.07 percent of their market prices. Only hotels and tourism had its group index increased, while the remaining 12 groups lost their market values.
