--By Bikram Chitrakar

 

Securities market during December 23, 2013 to January 22, 2014 moved higher on the expectation of healthy quarterly reports of the listed companies and positive clues in the political front of the country. The benchmark Nepse index added 15.19 points or 1.94% for the review period to rest at 783.91 while the session’s high was on 19 Jan with 795.26 and lowest was at the opening of 2014, 1 Jan with 754.37. 

 

Involvement of old investors in booking the profit, holding new position and attraction of new investors in the market-gaining situation explain the higher market turnover. Besides, the availability of funds at reasonable interest rate from the banking system has attracted the attention of investors towards the capital market. The central bank has already premiered the several sessions of reserve repo, one of the instruments of monetary policy, in curbing the excess liquidity from the system.

 

During the review period, Initial Public Offering (IPO) of three companies debuted in the capital market. IPO of Mithila Laghubitta Bikas Bank, Century Commercial Bank and Nepal Community Development Bank received good response, driving investor’s attention to the primary market affecting the secondary market for few sessions. However, the secondary market could not correct its momentum as per the expectation of experts.

 

On the occasion of 21st Anniversary and AGM of Nepal Stock Exchange (NEPSE), Sitaram Thapaliya, General Manager of NEPSE revealed that the exchange is planning to put a digital display at the prime location of Kathmandu Valley to disseminate the transaction information to the general public. Side by side, NEPSE is also planning to provide the live price scroll in different television channels for quick and effective information flow. Stakeholders have welcomed the move of NEPSE and await the quick implementations as those actions will further broaden the market information sharing process. 

 

Sector Wise Performance

During the review period, most of the sub-indices gained leaving only the manufacturing sub-index with that suffered small loss. The Insurance sub index rose as high as 77.05 points or 3.51% to close at 2194.51. The Hydropower sub index accelerated 63.98 points followed by 42.63 points up in development bank sub index. Hotel sub index added 35.61 points for the review period to settle at 1175.7. ‘Others’ sub index accelerated 9.40 points to close at 790.67 while the banking sub index ascended 3.24 points to rest at 774.27. However, the sub index of manufacturing and processing sectors plunged 3.28 points or 0.35% to rest at 931.27 during the review period.

 

Sensitive index that measures the performance of 120 class ‘A’ companies under NEPSE moved uphill 1.21 points or 0.70% to rest at 173.64 while the float index surged by 1.23 points to close at 52.41. For the review period, a total of Rs. 7.64 billion turnover was realized from the trading of 17.43 million units of shares via 53,560 transactions.

 

The accompanying picture depicts the sector wise distribution based upon the total volume of trade. It shows that most of the turnover has been captured by the banking sector and insurance sector as they occupied 67.57% of total turnover and 13.53% of total units of shares traded respectively. The rest of the sectors covered up the remaining portion with less than 10% in individual sector. 

 

Technically, the Simple Moving Average seems sluggish for both long term and short term and index has topped the 230 days high. However, the downfall of index at this level suggests further correction leading the index down to the 30-day average.

Chitrakar is a Stock Analyst with Jamb Technologies Pvt Ltd.