What is dragging the NEPSE down?

Sep 10, 2017 Merolagani



In the previous years, the securities market used to be in bullish trend during the dividend announcements season. But the picture is different this year. Now is the time of announcing dividend by the listed companies, however, the market is in bearish trend unlike previous years. On the first trading day of the week, the NEPSE index lost 21.68 points within first two hours of trading. Among the traded groups, production sub-group lost the highest point of 143 points.

The NEPSE index that opened with 1554.55 points fell to 1532.87 points till 1 PM. As per Priya Raj Regmi, President of Stock Brokers Association, the primary reason for this downfall is the increased supply of the shares in the market. In the last FY, the listed companies in a bid to raise their paid-up capital influx the market with the significant number of bonus and right shares. Moreover, some companies also issue further public offerings and there is the initial public offering of several companies as well. Thus, the number of shares while increased tremendously in the market, number of investors did not increase accordingly resulting downfall of the securities market.

Another reason he stated is the upcoming festive season. The share investors were continuously inserting their limited source on right shares offered by the listed companies. Now that the festive season of Dashain is approaching, investors are accumulating the funds for the festival through the stock sale.




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