The Nepali stock market remained stable during the review period despite the recent sharp fall. The benchmark Nepse index added 3.71 points or 0.40% to reach 923.59 while the session’s high was on 30 September with 937.99 and lowest was on 22 September with 881.87. 

    

Most of the new investors who bought at the highest point got panicked creating panic sell after the index started falling down. This event again indicates that our capital market is dominated by persistent speculation rather than investing. The market turnover fell down 41.12% in the review period as Dashain and Tihar festivals reduced the investors’ presence. Confusion regarding the dematerialized transaction added to the woes.

 

Nepal Stock Exchange started demat  trading system for trading shares of commercial banks. The provision came into effect as part of Nepse’s effort to implement the first phase of Central Depository System. After Dashain, buyers of shares of commercials banks are required to have dematerialized account while sellers are allowed to sell in the physical form. This new system has created confusion among investors as most of them seemed to be unprepared for such setting.    

 

Buying sentiment was further cooled down as investors waited for dividend announcement from the listed companies. Probably investors are also waiting to see how political developments come up after Tihar and Chhath festivals. 

 

Insurance sector increased the most (by 270.75 points or 7.37%) during the period to close at 3944.15. Hotel sector added 80.71 points or 4.40% to reach 1913.76. Similarly, hydropower sector accelerated 2.78% followed by 2.49% up in the manufacturing sector. ‘Others’ sector was marginally positive (less than 1 percent) while commercial bank fell down by 12.90 points or 1.56% to 815.41. Finance companies sector lost 1.38% and development bank pared 0.75% to rest at 684.54.  

 

Sensitive index, the performance measuring rod of ‘A Grade’ stocks, plummeted 0.13 points or by 0.07% to 197.62. However, the float index inched up marginally by 0.20 points or 0.31% to 64.80. The market capitalization for the period was Rs 947.81 billion, which was 0.85% higher for the review period while the turnover was down by 41.12%. 

 

Across the sectors, the commercial bank accounted for the major portion by acquiring 63.16% of total trade. Insurance sector occupied 13.64% while hydropower and development bank shared above 9% of the trade. Remaining portions were covered by other sectors. 

Technically, the Simple Moving Average (SMA) is dominated by the index in both short term (30 day SMA) and (200 day SMA). However, the 30 days SMA breaks at the level of 919.68 indicating neutral for confirmation signals.