Kathmandu. The banking sub-group index gained the highest by 4.23 percent as the NEPSE rose by 15.54 points on Wednesday. All listed commercial banks rose in value. NMB Bank was among the top three companies with the highest value growth. Its share price increased by 8.47 percent.
Krishi Bikas and Nabil Bank were also included in the list of 5 companies with the highest price increase. Share prices of commercial banks increased for the fourth consecutive day.
The banking sub-group index rose by 2.63 percent on Sunday, 4.18 percent on Monday and 1.77 percent on Tuesday. Since last one year, Commercial Bank has stopped being in the list of top 30 companies based on transaction amount, now the transaction volume of the bank has increased.
After the Nepal Rastra Bank adopted some flexibility through the third quarter review of the monetary policy on Friday, June 4, the rising NEPSE increased by 112.73 points to 2131.49 in 4 days.
This height taken by NEPSE is the highest since last January 2. At that time the index reached the point of 2175.17. After the monetary review, more than 5 billion rupees are being traded in the market daily.
Share prices of half a dozen commercial banks fell below Rs 150 per share in the last one year. The share price of Kumari Bank reached Rs 129 per share.
The share price of this bank has now reached Rs 154 per share. No bank shares can be bought below Rs 150 per share. The share price of Prabhu Bank, which fell to Rs 132, increased to Rs 157.
The share price of Standard Chartered, the most expensive commercial bank, has fallen to Rs 497 and has now reached Rs 598.
Experts say that due to the loose policy arrangements made by the National Bank, the share price of the bank has started to increase with a positive effect on the market.
“Past examples show that shares will not rise until the banking index falls,” said Fanindra Dahal, general secretary of the Stock Brokers Association of Nepal. When it comes to banking, now the prices are gradually returning to the rhythm.’
Rastra Bank has increased the limit of share sale to banks through review. Banks and financial institutions have a provision to sell 1 percent of their primary capital shares in one year out of investments that have passed one year, but this has been increased to 20 percent.
Banks and financial institutions have invested about 2 trillion rupees in the stock market. According to the experts, the loose provision made to them in the sale of shares will increase the liquidity along with the transactions in the market.
As a result of the monetary review, the National Bank has also reduced the provisioning amount of the banks. This will increase their net profit. Commercial banks have made loan loss provisioning of 2 trillion 4 billion 19 crore rupees till March of the current financial year without raising loans.
‘It is not possible to say how long the current excitement in the market will last. However, there is a positive atmosphere,” said market analyst Mukti Aryal, “Investors took the review of monetary policy positively. Now there are events including budget, monetary policy. That can make a difference.’
It is not even a week until the day of announcing the budget for the next financial year. Investors, brokers and analysts understand that the budget will be market-friendly because Finance Minister Varshman Pun has said that he will give priority to the reform of the stock market since he was appointed.
Not only that, they believe that because Minister Pun said that there will be harmony between the budget and the monetary policy through public forums, the National Bank can adopt a policy that favors the market.
‘The market, which has been panic for a long time, was looking for something positive. Rastra Bank has shown a positive signal through the review of monetary policy,’ said Dahal, ‘that is why NEPSE has started to increase. Now, it is expected that there will be more improvements towards the market through the coming budget and monetary policy for the coming year.’
