The Stock Market in Nepal : Bullish Trend on the banking Sector of Nepal

May Sat 2024 09:29:55

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The Stock Market in Nepal : Bullish Trend on the banking Sector of Nepal

There were 4 trading days in the stock market this week. In the 4 days of trading this week, the market rose on 4 days. The market closed at 2131.49 points this week, which closed at 2018.76 points in the previous week. Based on this, the stock market has increased by 112.73 points this week. In the previous week, the market had increased by 52.53 points. According to this, the market has increased by 165.26 points in 2 weeks.

About 22 billion shares were traded in the market this week. Considering this, the long-term declining market has seen an improvement in both transactions and indicators this week. Technically, this week, the market condition is good. This week, the market broke the 2040 point and made a new higher high.

Bullish trend on the banking Sector

The stock market is up trend in nepal. Along with the NEPSE index, the daily transaction amount has also increased. The banking group has increased the most by 4.23 percent. For the past few days, there has been an increase especially in commercial banks. This group was the most sluggish in the last 3 years. The price was very cheap. However, common investors were not at all interested in the bank's shares.

But after the third quarter review of the monetary policy, there has been a sudden boom in the banking group. The Central Bank has made some regulatory arrangements to help the profitability of banks. As a result of this, experts say that enthusiasm has increased in the banking group. Besides, the banking group has not grown too much. Even in the previous bull, there was no good growth in this group.

Banks will be allowed to sell 20 percent of core capital shares after 1 year. Especially now, it is seen that banks and financial institutions can increase their investment in the stock market.

Banks have got an opportunity to invest in cheap shares and sell them after 1 year. Since it is possible to sell shares after 1 year of purchase and show profit, there is a situation that will help in increasing the profit of banks.

It seems that the provisions made in the monetary policy will also help in increasing the profit of the banks. The percentage of loss amount allocated by banks to good loans has been reduced. According to the new provision, now banks will keep 1.20 percent in loan loss for good loans.

Earlier, 1.25 percent loss provision had to be maintained for good category loans. Experts say that this will help increase the profits of banks. Similarly, it is estimated that investors are attracted to this group because the prices are constantly decreasing. As the market started to grow, the morale of common investors is also becoming positive.

Besides, the broker commission has also been reduced. Interest rates have further decreased. These new arrangements can also help to bring a positive atmosphere in the stock market. The season has also started in the stock market. Generally, the months of May, June, and July are considered as stock market season. 

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