Kathmandu, October 24
The stock market has experienced a decline following the release of weak first-quarter financial reports from banks for the current fiscal year.
The banking sector typically has the most significant influence on the overall stock market. While the reports show an average improvement in profits, the increase is not due to growth in core business activities like net interest income, but rather due to some regulatory easing. On the other hand, there has been no significant improvement in non-performing loans (NPLs).
Although it was anticipated that banks would recover non-performing loans, leading to a sharp rise in distributable profits, some banks have reported negative distributable profits.
As a result, on Wednesday, the banking sector saw the steepest decline, dragging down the entire stock market. The NEPSE index dropped by 20.41 points, or 0.76%, settling at 2,645 points.
The trading volume, however, increased. While the previous day’s trading amounted to Rs 4.17 billion, today’s turnover reached Rs 6.27 billion. Prices rose for 76 companies, fell for 155, and remained unchanged for 13. Although NEPSE dropped by 0.76%, the banking sector saw the largest decline of 1.70%.
Development banks fell by 0.65%, hotels and tourism by 0.75%, hydropower by 0.53%, investment by 0.35%, life insurance by 0.71%, manufacturing by 0.38%, microfinance by 0.32%, non-life insurance by 0.43%, and the ‘others’ category by 0.45%. The trading sector increased by 0.25%, while the finance sector saw a significant rise of 2.32%.
ICFC Finance saw its share price rise by 10%. Prices for Samriddhi Finance, Manjushree Finance, and Sahas Urja increased by 9.93%, 6.67%, and 5.8%, respectively.
On the other hand, Mahuli Laghubitta’s price dropped by 4.28%. Himalayan Bank fell by 4.07%, Citizens Bank by 3.97%, Green Venture by 3.93%, and Prabhu Bank by 3.88%. Nepal Investment Mega Bank declined by 3.6%, Sanima Bank by 3.03%, Agricultural Development Bank by 2.94%, and Kumari Bank by 2.86%.
In terms of transaction volume, ICFC Finance, Kumari Bank, Sahas Urja, Samriddhi Finance, and Himalayan Distillery led the market.
