Market analysts said high bank interest rates on lending as compared to dividend and frequent margin calls by banks are the major causes behind deepening gloom in the stock market. [break]
“Investors have become discouraged as the government failed to fulfill the demands put forth by the agitating share investors. We can´t expect rally in share trading as long as the existing problems in the capital market aren´t addressed by the government,” said Nanda Kishore Mundada, president of Nepal Stock Brokers´ Association.
During Tuesday´s trading, Banking, the key trading group in the secondary market, saw its sub-index nosedive by 6.06 points to settle at 468.39 points. Development Bank and Finance groups also lost their sub-indices by 2.4 points and 2.81 points to close as 523.51 points and 480.69 points respectively.
However, the sub-indices of Hydropower and Insurance groups went up by 1.52 points and 3.31 points to settle at 781.23 points and 576.37 respectively.
Total turnover in the secondary capital market touched Rs 28.68 million on Tuesday with a total of 64,816 units of shares and 66 units of scrips changing hands through 1,223 transactions. Total market capitalization - the total market value of listed shares -- stood at Rs 3.87 billion.
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