32 May, Kathmandu. The ‘speculative’ trend is becoming dominant in the stock market. This week, among the listed companies in the stock market, there has been a high fluctuation in the share price of companies with low supply.
In the stock market, the supply of shares is less than the fundamental condition of the company, and companies with small capital increase the price by cornering one after the other, and when the price rises, the group itself exits.
Out of the five trading days of the week, the market index NEPSE has closed on three days with an increase and on two business days with a decrease. Throughout the week, the overall market index NEPSE increased by 1.66 percent and closed at 2112.29 points.
With a general increase in NEPSE, business also looks positive. There was a decline of 4.59 points on Sunday and 9.32 points on Thursday. NEPSE increased by 8.90 points on Monday and closed with an increase of 33.15 points on Tuesday and 6.37 points on Wednesday.
28 billion 57 billion 22 million rupees were traded throughout the week in the market with a turnover of more than 5 billion on the five trading days of the week.
In the market dominated by ‘trading’, the microfinance, finance company and hydropower sub-indices have increased at a high rate, while the same sector has led the business throughout the week.
If the newly listed hydropower company does not open the lock-in, the supply of shares will be reduced and it will be easy for the trader to corner the price. Similarly, when the share supply of microfinance and finance companies with small capital is low, it is easy to increase the price by cornering, so those who are looking for high returns in a limited period are investing in such companies in groups.
After reaching one price, selling shares from that company and again cornering in another company in the same way, the share price of the group’s company has fluctuated a lot, and the amount of shares traded is also high.
Microfinance sub-index has increased by 8 percent among the NEPSE sub-indexes throughout this week. Similarly, the trade sub-index, which has only two companies namely Big Market and Salt Trading, increased by 7.21 percent, while the finance company sub-index increased by 6.12 percent.
Similarly, while the hydropower sub-index increased by 5.13 percent, the development bank sub-index increased by 2.21 percent, while the other sub-index increased by 1.96 percent. On the other hand, while the production and processing sub-indices showed the highest decline of 2.29 percent, other sub-indices decreased by 0.487 percent.
While the banking sub-index, which has the largest share in the market, had a general increase of 0.26 percent, other sub-indexes increased significantly, but the NEPSE index did not increase significantly.
This week, when there is a total turnover of 28 billion 572 million in the market, more than one third of that turnover is from Hadropower company alone. Hydropower companies alone have a turnover of 9 billion 727 million.
Similarly, the share of microfinance companies is about 17 percent and 4.79 billion 32 million and finance company’s 12 percent is 3.46 billion 87 million.
In terms of market capitalization and share supply, the largest banking sector has only 3.75 percent share in the total turnover. During this week, the share turnover of commercial banks was only 1 billion 717 million rupees.
NRN Infrastructure and Development Company is the most traded company throughout the week. Its shares worth 1 billion 58 crore 43 lakh rupees have been traded alone.
Similarly, while shares of CEDB Hydropower Company were traded at 792.2 million shares, Mountain Energy’s shares were traded at 782.23 million shares.
Even in the companies whose share prices rise and fall, there are companies whose share supply and capital are low. The share price of Kutheli Bukhari Hydropower Company which has increased the most this week is only 1 lakh shares. Out of the company’s public shares of 244,000 shares, the lock-in of the IPO issued to the affected locals and employees has not been opened. The company’s share price increased by 42 percent in a week.
Similarly, the share price of Mankamana Smart Laguvitt, which has increased by about 32 percent in a week, has only about 477,000 shares.
Barun Hydropower, whose share price has increased by about 31 percent, has about 50 million shares, including the founder and ordinary shares. The share price of Samriddhi Finance increased by about 22 percent. The share supply of Samriddhi Finance is only about 33 lakh shares.
On the other hand, among the companies whose share prices are falling, there is also the presence of microfinance companies whose prices have increased in the last week. The share supply is limited due to the non-opening of the founder shares of Buddhbhoomi Hydropower. The share supply of Jalpa Community Microfinance is also low and it is being merged with Kisan Microfinance. Janaki Finance, Lakshmi Laguvitta, Himalayan Laguvitta are the companies that have come to correction after one step price increase.
