--By Bikram Chitrakar

The secondary market of Nepal bid farewell to the year 2069 on a sweet note. However, profit booking cooled down the market a bit. The benchmark Nepse index descended 14.41 points or 2.77% to settle at 520.69 while the session’s high was on 17 March with 535.10 and lowest on 31 March with 511.45.

Profit booking in different sectors persists now after the warming up of the secondary market for some time in the recent past. This follows nearly two years of down market. Investors started securing their positions as the Nepse index tested its level near 550. 

Objection of the smaller political parties after the formation of the new government has also dragged the market down. Different protest programs from the small parties pulled the sentiments in a few sessions.

During the review period CDS and Clearing Ltd started its operation for digital clearing and settlement. Currently there are seven Depository Participants (DP) who can facilitate opening of demat accounts. Similarly, 6 out of 226 listed companies have signed for dematerialization of their shares. 

Full-fledged digital operation will facilitate quick transfer and settlement process. Similarly, right issue, voting and other matters can also be flashed on screen increasing the trade turnover rate. 

Around eight companies have lodged application with Securities Board of Nepal for permission to issue an initial public offering(IPO). The combined weight of these applications is Rs 1.45 billion. Hence it is sure to increase the flow of share in the market while the direction of the market will be framed also by the upcoming quarterly financial reports.

Performance by Sector

Banking sector with significant volume of trade in local exchange slipped 16.78 points or 3.21% to rest at 522.12. Others sector with heavy concentration of NTC plummeted 39.94 points or 5.96% to settle at 669.68. Hotels sector lost 13.59 points followed by 13.08 points down in hydropower sector to 649.99 and 1029.48 respectively. Development bank descended 7.13 points to close at 248.78 while the finance sector receded 4.01 points or 1.59% to 251.55. However, insurance sub-index accelerated 10.77 points or 1.21% to rest at 888.68.The manufacturing sector surged 4.88 points or 0.58% to settle at 840.23

Sensitive index that measures the performance of 120 blue chips at the secondary market plunged 4 points or 3.04% to 131.47 while the float index calculated on the basis of real transactions went downhill 0.86 points or 2.34% to 36.71. Total of Rs. 1,711,318,453 turnover was realized during the review period from 6,534,271 units of shares traded via 23,595 transactions. 

The accompanying figure depicts the sector-wise distribution based on the total volume of trade. The commercial banking sector accumulated 75.08% of total volume of trade. The hydropower sector occupied 7.63% followed by the insurance sector with 7.16% while remaining sectors covered the rest.

Technically, the Simple Moving Average (SMA) shows stationary movement in short term as both Nepse index and 30 days SMA are moving flat. Persistent sell-off in this level can trigger upside correction. However, high volatility is not expected. 

Chitrakar is a Stock Analyst with Jamb Technologies Pvt Ltd.