Provisions to boost businesses and the secondary market that were included in the Monetary Policy unveiled by Nepal Rastra Bank on Friday has had a positive impact on Nepal Stock Exchange.

The stock exchange today witnessed three circuit breakers within a span of just over an hour on the first trading day of the week as the benchmark index breached the upper limit of expansion and trading was suspended.

The first circuit breaker was applied at 11:06 am for 20 minutes when Nepse increased by 4.04 percent or 56.44 points to touch 1,451.21 points. The second upper circuit was applied immediately one minute after the market opened for 40 minutes when the index surged by 5.01 percent or 69.91 points to 1,464.68 points.

Again, it took only one minute for the market to suspend trading for the rest of the day after Nepse resumed at 12:07 pm, when it immediately soared by 6.04 percent to close at 1,479.03 points.

Stock investors said this surge was due to the government’s positive note regarding the secondary market. “In an effort to provide respite to businesses that were badly hit by the coronavirus pandemic, NRB had announced providing subsidised loans at five percent interest rate for targeted sectors. That means a lot to us,” said Radha Pokharel, chairperson of Nepal Pujibazaar Laganikarta Sangh.

She added that with an aim to increase liquidity in the banking sector, the Monetary Policy had relaxed the core capital-cum-deposit ratio to 85 percent from the existing 80 percent. “This will help investors manage sufficient liquidity for share investment and the stock market will likely boom in the near future,” Pokharel added.

Along with the Nepse index, the sensitive index also went up by 5.89 per cent or 17.39 points to 312.44 points and the float index gained 6.2 per cent or 6.04 points to reach 103.45 points today.

The total turnover amount today stood at Rs 62.5 million, achieved through trading of 180,596 units of shares of 111 listed companies through 663 transactions.

Among all the subgroups, only mutual funds landed in the red zone with a nominal drop of 0.04 per cent to 10.47 points. The trading and hotels subgroup did not witness any transaction.

The banking subgroup was the highest gainer of the day, surging by 7.44 per cent or 88.87 points to 1,282.86 points as share price of Nabil Bank soared by Rs 79 to Rs 869. Life insurance sub-index increased by 6.68 per cent or 548.66 points to reach 8,767.14 points.

Other subgroups ascended by 6.36 per cent or 49.33 points to climb to 824.65 points, while manufacturing sub-index rose by 5.16 per cent or 141.78 points to surge to 2,889.02 points.

Microfinance went up by 3.78 per cent or 92.39 points to stop at 2,537.85 points, hydropower sub-index went up by 3.73 per cent or 36.36 points to rest at 1,012.46 points, while development banks expanded by 3.55 per cent or 63.13 points to reach 1,834.61 points.

Moreover, non-life insurance subgroup increased by 3.2 per cent or 202.4 points to reach 5,526.95 points and finance inched up by 1.34 per cent or 9.01 points to stop at 680.53 points.

Among the top gainers today, share prices of five companies increased by the daily limit of 10 per cent. Share price of Gurans Laghubitta Bittiya Sanstha, NIC Asia Bank, Nabil Bank, Nepal Investment Bank and Nepal Investment Bank (Promoter Share) increased by 10 per cent to Rs 1,012, Rs 627, Rs 869, Rs 484 and Rs 407, respectively.

https://thehimalayantimes.com/business/monetary-policy-triggers-bullish-run-at-bourse/