Nepse index dipped below the psychological mark of 500 points for the first time after April 15, 2007, it had closed at 497.73 points. The benchmark index had touched a new high of 1175.38 points on August 31, 2008, as most of the backs were preparing to increase their capital base to Rs 2 billion, raising hopes among investors of rights issue. [break]
Share analysts said higher rate of return in other sectors, higher interest rates in both deposits and lending by banks and financial institutions and fresh margin calls by banks are among the major factors discouraging investors to retain their investment in the stock market.
“Older investors are discouraged and the new ones are not interested to put their money in stock given the low rate of return,” Nanda Kishor Mundada, president of Nepal Stock Brokers´ Association, told myrepublica.com.
Banks are offering around 8 percent interest in deposits whereas companies are distributing around 2 to 3 percent dividend to their share holders.
“We haven´t seen any indication that the capital market will improve market in the coming days,” added Mundada.
During Sunday´s trading, Banking, Development Bank and Finance groups saw their sub-indices go down. However, sub-indices of the Hydropower and Insurance groups moved to the green zone on Sunday. Banking -- the heavyweight group in Nepal´s capital market -- lost 6.04 points to close at 473.81 points. Similarly, Development Bank and Finance groups also lost 7.56 points and 0.87 points to settle at 534.53 points and 496.02 points respectively.
The Hydropower and Finance groups gained by 0.32 points and 0.05 points to close at 802.81 points and 575.02 points respectively.
A total of 52,696 shares and 53 scrips worth Rs 30.56 million changed hands through 960 transactions on Sunday. Total market capitalization -- total value of listed shares --stood at Rs 99.58 billion.
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