Stock trading at Nepse halted as market registers a steep fall

Stock trading at Nepse halted as market registers a steep fall
Nepalnews.com, 9-Oct-07

Four days after registering an impressive growth, the stock market recorded a steep fall Monday, proving right the fears of trade analysts that the overheated market may not be sustainable.

The Nepse index fell by a whooping 25.46 points to close at 873.92 points Monday, after which Nepse intervened and for the first time in its history, suspended trading for the day.

Reports quoted Nepse officials as saying that the decline was mainly due to the central bank’s latest directives, which cleared the way for increased supply of shares for trading and also tightened margin lending–loans against stocks.

Following the crash, the Nepse’s market capitalization decreased to Rs 269.1 billion from Rs 277 billion.

Referring to the cause behind the decline, officials said Nepal Rastra Bank (NRB) on Sunday directed banks and financial institutions to sell cross-holding shares—the stock that they owned in another bank or financial institutions.