Thursday, June 9, 2016

Nepse hits new all-time high

Propelled by the insurance companies sub group, Nepal Stock Exchange (Nepse) today gained 19.9 points to close the market at fresh all-time high of 1,566.7 points. The insurance sub group jumped by 595.43 points today – pushing the overall Nepse index to the all time high – though the movers and shakers of the share market banking sub group lost 1.04 points.
The share market also recorded its highest ever single-day transaction of Rs 1.89 billion breaking its previous record of Rs 1.44 billion of May 23.
Share market pundits attribute the rise in the transaction to increasing demand and supply of stocks, and also the impact of the budget. The budget announcement of hosts of insurance schemes has been supportive to the insurance companies' market expansion, thereby making huge profits which would ensure better returns for the investors.
On one hand the increasing number of new buyers is getting attracted towards the stock market, whereas on the other, a number of investors are booking profits, boosting the transaction volume. Likewise, the increasing liquidity – that helped margin lending – in the banking sector is also fuelling the share market.
After hitting 1,544.65 points on May 24, the market dropped slightly to 1,483.14 points last Monday on rumours about central bank's plans to introduce a stern policy on margin lending. However, the central bank clarified that it was only the rumour, which helped boost the investors' confidence.
The share market has been in bullish trend since last couple of months due to paperless transaction and also the leakage of budget's hosts of insurance schemes. The market has been witnessing transaction of over Rs 1 billion every day – breaking all past record transaction – since last one week after the budget was leaked. Earlier, the market used to see transaction of around Rs 500 million only. Transaction started increasing after Nepse started demat transaction – or popularly known as paperless transaction of stocks – from January 15.

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