The Kathmandu stock exchangeebbedout marginally during the Dashain-Tihar festival season of this year as the dip in the prices of banking stocks pulled the index for most of the session. The benchmark Nepse index plummeted 3.59 points or 1.09% to close at 327.99. The highest point during review period was on 12 October with 334.49 while the lowest was on 23 October with 326.42.

Normally, the festival season causes outflow of money from the stock market. However, this year it was not so. Many companies have already declared their earnings and announced the dividend rates while others are preparing to do so. The book closing days are also coming around for the AGMs.

All these are making the investors to heed the market movement more closely. Investors are dismayed at the delay in the operation of CDS and Clearing Ltd. the Commission for the Investigation of Abuse of Authority (CIAA) has started investigation on the suspicion that there has been abuse of authority in employee recruitments and in some expense of this company. Regulations of CDS and Clearing Ltd are also pending approval from the Securities Board of Nepal (SEBON). One positive development of the period is the appointment of SEBON Chairperson. Newly appointed Chairperson Babu Ram Shrestha has already taken over the responsibility and it is hoped that the CDS Company will get its regulations approved soon. During the month, a number of financial institutions made some definite progress towards their plan of merger.

As a result, the stock exchange has halted trading in the stocks of those companies. That has subdued the trading volume. Hence it can be said that the market will show sideways movement for few coming sessions. Performance by Sector Banking sector that has been dominating the volume of trade in the Kathmandu exchange lost 8.65 points or 3.09% to close at 279.69 during the review period.

Insurance sub-index plummeted 5.53 points or 1.39% to 398.14. Finance sector receded 4.54 points or 1.66% to rest at 272.88. Hotel sector descended 3.59 points along with 3.10 points decline in development bank sector to 379.01 and 278.90 respectively. The others sector shed 1.17 points or 0.24% to settle at 26.94. However hydropower sector registered a heavy growth of 44 points or 7.23% to reach 608.67.

Trading sector gained 4.63 points or 1.85% to close at 250.71. Sensitive index that measures the performance of 117 blue chips descended 1.78 points or 2.22% to 80.02 while the float index calculated on the basis of real transaction skid 0.34 points to 26.94. Total of Rs. 474010954 was realized during the review period from 3000729 units of share traded via 18846 transactions.

The accompanying figure illustrates the sector-wise distribution based on total amount of trade. As usual, the banking sector accounted for 49.62% of total trade. Likewise, hydropower sector accounted for 22.95% while development bank covered 11.07%. Finance sector accounted for 7.39% and remaining sectors made up for the rest. Technically, Simple Moving Average (SMA) is dominating the market as 200 days SMA is far from the index while 30 days SMA is moving together with the index indicating further possibility of sideways movement for few more sessions.

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