KATHMANDU, Aug 19, The Nepal Nepal Stock Exchange (Nepse) index rose by 31.99 points to cross the all-time high of 1175.38 reached on August 31, 2008, reaching 1191 on Wednesday. Share analysts gave mixed response to historic rise of the only share market in the country.
The Nepse index has been rising since the Nepal Rastra Bank (NRB) brought the Monetary Policy for the current fiscal year requiring banks and financial institutions to raise their paid-up capital by up to four times, and has been aided by positive political environment and adequate liquidity in the financial sector. Nepse had also reached the previous high building on the momentum gathered after the first Constituent Assembly (CA) election held in April that year. The market had then started to plummet following international financial crisis. Criticism of the market by the then finance minister Dr Baburam Bhattarai as a gambling house had worsened matters.
Investment on securities has increased with the new constitution almost certain to be brought soon. There has been significant rise in both individual and institutional investment in the market with the political environment improving. Experts say share investment also has increased as deposits in banks and financial institutions are being mobilized for a greater return with interest rate not rising due to adequate liquidity in the banking sector and competition among banks and financial institutions. The market is also positive due to reconstruction-centered budget and the central bank’s instruction to banks and financial institutions to stress on bonus shares while distributing dividends to the shareholders. Trading of commercial banks, however, is being done virtually and not physically, and the market has also improved as demand for shares of banks have far exceeded supply as a result.
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