By Bikram Chitrakar

 

The benchmark Nepse index stretched 10.85 points or 2.14% to close at review period high of 506.45 while the low was on 23rd June with 487.63. 

 

The index climbed back to nearly four months high surpassing the previous resistance level of 500. Investor’s expectation of the full budget for fiscal year 2013-14 was the main reason. 

 

In the review period, the market also experienced positive supply shock. Initial public offering (IPO) of Mega Bank Nepal, right issue of Nepal Bank Ltd and some other IPOs and right issues absorbed the liquidity. This put pressure on the investors to sale off their stocks to unfreeze the funds for investment in the primary issues. Further, fiscal year-end tightening on margin loan from the financial institutions played its role to make the investors to offload some shares. Still the market saw an overall positive growth indicating further growth in the days ahead. 

 

Rumours that Nepal Rastra Bank is all set to instruct financial institutions for raising paid-up capital acted as a spur to lift banking stocks. 

 

Meanwhile, Sitaram Thapaliya has been appointed as the General Manager of Nepal Stock Exchange. The position was lying vacant since January 2013 after the tenure of Shankar Man Singh came to an end. Assuming office, Thapaliya said he would try to upgrade the online trading platform to facilitate the traders beyond located outside Kathmandu valley and abroad. 

 

Performance by Sector 

During review period, insurance sub-index added 29.79 points. That was followed by 29.37 points up in the ‘others’ sector on the back of gain in the price of Nepal Telecom. Hotels sector went up 18.22 points or 2.75 percent to 662.85. Commercial banking sector posted growth of 9.74 points. However, manufacturing sector receded 7.74 points to 868.72 while hydropower sector plummeted 1.87 points to rest at 1041.43. 

 

Sensitive index that measures the performance of 120 blue chip companies went up 2.21 points to 126.12 while the float index which is calculated on the basis of real transaction went uphill 0.26 points to 35.75. A total turnover of Rs. 1,817,767,779 was realized during the review period from 8.530,819 units of shares traded via 25,787 transactions. 

 

As usual, the commercial bank has occupied the 77.65% of total volume of trade. Hydropower sector accounted 12.84%, insurance covered 9.57% and rest was made up by other remaining sectors. 

 

Technically, the Simple Moving Average (SMA) has been outcast by Nepse index while the index has crossed the level of 500. The 30 days SMA and 200 days SMA are in tight range suggesting resistance test at this level.

(Chitrakar is a Stock Analyst with Jamb Technologies Pvt Ltd.)