Thukten Zangpo

After a continuous stock price dips in the secondary market from November last year, it saw a steady rise from March this year.

The market capitalisation (M-Cap) increased by over Nu 2 billion (B) at Nu 51.46B as of yesterday compared to December-end last year.

M-Cap is the value of shares at the prevailing market price of the 19 companies listed with the Royal Securities Exchange of Bhutan (RSEB). It is derived by multiplying the number of existing shares by current market prices, meaning that an increase in either the number of the prices or stock will contribute to M-Cap.

With the number of shares remaining constant, it is attributed to the prices of shares moving up. This means that more people want to buy a stock (demand) than sell it (supply).

Records from the RSEB show that as of April 10 this year, shares worth Nu 2.77B were traded in the secondary market, which is an increase of more than three times compared to the same period last year. Shares worth Nu 755 million (M) were traded as of April 10 last year.

Similarly, the Bhutan Stock Index (BSI) was recorded at 1036.53 as of yesterday. BSI was at 1036.65 on November 8, which dipped to 979.39 on March 29 this year.

The BSI measures the stock market’s performance and serves as a benchmark for investors measuring the performance of their own investment portfolio.

It was set at 1,000 as the baseline on December 31, 2019. Gains above or drops below the baseline indicate the price change.

An official from RSEB said that the stock market reflects the sentiments of the investors and the price of the securities in the market depends on the behaviour of investors.

Some of the top gainers were Bhutan Polymers Company Limited; its share price rose to Nu 48.50 from Nu 30 per share. The price of Bhutan Board Products Limited’s share rose to Nu 42.90 from Nu 13.95. Druk Wang Alloys Limited’s share price rose to Nu 151.61 from Nu 98.

Druk Wang Alloy Limited’s ferrosilicon was the top exported commodity with a value of Nu 7.44B in 2020. The export price was between Nu 135,000 to 150,000 per metric tonne in March this year and is expected to rise.

While the biggest drop, Penden Cement Authority Limited’s share price dropped to Nu 100 from Nu 126. Because of the coal shortage, the Authority has been closed since February this year.

Bhutan National Bank (BNB) and Royal Insurance Corporation of Bhutan (RICB) made up about 50 percent of the market shares; these two companies are currently dictating the BSI.

The share trading takes place five times a week in five working days. RICB, BNB, GIC-Bhutan Re-Limited, Sherza Ventures Limited, and Bhutan Insurance Limited are the top five most traded shares.