KATHMANDU, July 30: The market capitalization of Nepal Stock Exchange (NEPSE) crossed Rs 5 trillion for the first time, due to the investors being attracted to invest more on the country’s secondary market.
According to the NEPSE, the market capitalization surged by Rs 640 billion in the past month. On June 29, the amount was recorded at Rs 4.369 trillion under the heading. Over the period, the NEPSE index surged to over 3,000 points from 2,622.28 points, while the daily turnover also rose to an average of Rs 18 billion from mere Rs 5-6 billion.
NEPSE market capitalization rises by Rs 1.2 trillion in a year
Market capitalization refers to the cumulative of current market value of stocks of all the listed companies. Higher market capitalization ensures increased book values of the shares held by the investors. The value of capitalization at the stock exchange has reached 82 percent out of the country’s GDP worth Rs 6.107 trillion.
Out of the market capitalization, the blue chip companies’ capitalization stands at Rs 2.319 trillion, which means that heavyweight companies hold 46.29 percent of the share values. According to the NEPSE, blue chip companies have strong financial performance, consistent dividends, and a solid reputation in the industry.
Stockbrokers say the increased attraction of investors towards stock exchange, the entry of new companies, and the overall market expansion of late have led to increased market capitalization. “The positive policy reform measures included in the central bank’s monetary policy for FY 2025/26 and declining interest rates of banks and financial institutions are among the major factors behind the surge in capitalization of stocks,” said a stockbroker on condition of anonymity.
The monetary policy has also taken lenient measures allowing the limit of margin loans for individuals to Rs 250 million from Rs 150 million. Likewise, banks have also reduced interest rates to around eight percent from 14 percent per annum.
