KATHMANDU, May 13, 2012
The losing streak continued at Nepal Stock Exchange (Nepse) for the third consecutive trading day on Sunday, as shares of most of the banks and financial institutions took a beating due to fall in profit levels in the third quarter of this fiscal year.
The benchmark index, which opened at 411.39 points, fell to 10-day low of 390.62 points by the closing hour on Sunday, tripping the circuit breaker thrice as the index fell below the levels set by the stock market operator.
Shares prices had started falling soon after the market opened at 12 noon. And by 12:35 pm, it had dipped three percent. Following this, the first circuit breaker for the day was rolled out and trading was halted for 15 minutes.
Another circuit breaker was introduced at 12:57 pm after the market index fell by four percent. This resulted in suspension of trading for half an hour. The downfall of share prices continued even after the trading resumed and by 2:26 pm the index had plunged five by percent, which brought the trading to a halt for the day.
Circuit breakers are rolled out after the market index rises or falls by three percent and four percent, following which trading is halted for 15 minutes and 30 minutes, respectively. The final circuit breaker is introduced if the index rises or falls by five percent, which results in closure of the market for the day. This is done to protect the share market from negative effects of sudden rise or fall in share prices.
The market had taken a dip on Sunday after stock prices of major commercial banks and financial institutions fell, as many started reporting low third-quarter profit.
Of around 19 commercial banks that have released unaudited figures for the third quarter through mid-April, only seven have reported rise in their profit levels. Their profitability took a beating after they allocated more amount for provisioning, as the proportion of their non-performing loans started going up due to their exposure to the real-estate market, which has remained docile for quite some time now.
Grand Bank, Sanima Bank and Citizens Bank, whose share prices fell by 10 percent to close at Rs 225, Rs 243 and Rs 237, respectively, were the biggest losers of the day. Likewise, stock prices of other commercial banks, such as Standard Chartered, Nabil and Everest fell by Rs 148, Rs 118 and Rs 53 respectively, and closed at Rs 1,902, Rs 1,302 and Rs 980.
However, these three banks have reported rise in profit levels in the third quarter. “But they could not take advantage of their latest financial reports due to fragile political situation, which has eroded investor confidence,” Anjan Poudel, president of Stock Brokers Association, told Republica.
The share market, which had embarked on a bull run after the political parties reached a deal to form national consensus government, has been moving down lately after political parties could not agree on number, name and boundary of federal states.
“Any positive development in political arena will again boost investor confidence and push the market up,” Poudel said.
Source: Republica
The losing streak continued at Nepal Stock Exchange (Nepse) for the third consecutive trading day on Sunday, as shares of most of the banks and financial institutions took a beating due to fall in profit levels in the third quarter of this fiscal year.
The benchmark index, which opened at 411.39 points, fell to 10-day low of 390.62 points by the closing hour on Sunday, tripping the circuit breaker thrice as the index fell below the levels set by the stock market operator.
Shares prices had started falling soon after the market opened at 12 noon. And by 12:35 pm, it had dipped three percent. Following this, the first circuit breaker for the day was rolled out and trading was halted for 15 minutes.
Another circuit breaker was introduced at 12:57 pm after the market index fell by four percent. This resulted in suspension of trading for half an hour. The downfall of share prices continued even after the trading resumed and by 2:26 pm the index had plunged five by percent, which brought the trading to a halt for the day.
Circuit breakers are rolled out after the market index rises or falls by three percent and four percent, following which trading is halted for 15 minutes and 30 minutes, respectively. The final circuit breaker is introduced if the index rises or falls by five percent, which results in closure of the market for the day. This is done to protect the share market from negative effects of sudden rise or fall in share prices.
The market had taken a dip on Sunday after stock prices of major commercial banks and financial institutions fell, as many started reporting low third-quarter profit.
Of around 19 commercial banks that have released unaudited figures for the third quarter through mid-April, only seven have reported rise in their profit levels. Their profitability took a beating after they allocated more amount for provisioning, as the proportion of their non-performing loans started going up due to their exposure to the real-estate market, which has remained docile for quite some time now.
Grand Bank, Sanima Bank and Citizens Bank, whose share prices fell by 10 percent to close at Rs 225, Rs 243 and Rs 237, respectively, were the biggest losers of the day. Likewise, stock prices of other commercial banks, such as Standard Chartered, Nabil and Everest fell by Rs 148, Rs 118 and Rs 53 respectively, and closed at Rs 1,902, Rs 1,302 and Rs 980.
However, these three banks have reported rise in profit levels in the third quarter. “But they could not take advantage of their latest financial reports due to fragile political situation, which has eroded investor confidence,” Anjan Poudel, president of Stock Brokers Association, told Republica.
The share market, which had embarked on a bull run after the political parties reached a deal to form national consensus government, has been moving down lately after political parties could not agree on number, name and boundary of federal states.
“Any positive development in political arena will again boost investor confidence and push the market up,” Poudel said.
Source: Republica
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