By Bikram Chitrakar

(Review for 19 Feb to 21 Mar, 2013)

The Nepali stock market receded from the green terrain during the review period as the investors gave top priority to political clues. The benchmark Nepse index shed 20.94 points or 3.97% to close at the review period’s low of 527.98 whereas the highest point was 548.92 on 19 Feb, 2013.

The index had reached 39 months high of 555.93 on 17 February 2013. The previous high of Nepse was 553.4 on 13 December, 2009. 

Protests voiced by some political sections on the appointment of Chief Justice Khila Raj Regmi as the chairman of the government is the main reason for the recent decline, say market analysts. 

Another reason was the profit booking by some investors lured by the new highs made by the Nepse.  

One major recent development is that Nepal Stock Exchange (Nepse) has started preliminary research to upgrade its current trading system. It was on 24 August, 2007 that Nepse replaced the open-out-cry system by remote trading system using Wide Area Network. That system enables brokers to connect to the Nepse server through remote location and perform the transaction. The new system being tried is to facilitate individual investors to place order from their own home using the broker’s system.

As the market has turned down touching a high due to profit booking and political climate, stationary movement is expected for few sessions until some healthy clues are received by the investors. 

Performance by Sector

During the review period, the “others” sector dropped down by 65.78 points or 9.30% to settle at 707.27. Manufacturing sector posted a heavy loss of 53.88 points or 6.44% to settle at 836.99. Hydropower sector plummeted 37.19 points to rest at 1035.86. The commercial banking sector declined 17.27 points or 3.27% to 528.02. Similarly, finance sector descended 1.56 points or 0.62% to 253.09. However, hotels sector added 5.89 points or 0.88% to reach at 666.97. Insurance sub-index gained 2.28 points or 0.26% to 881.02 while development bank accelerated 1.43 points or 0.57% to close at 252.76 

Sensitive index that measures the performance of 120 blue chip scrips at the secondary market skid 6.15 points or 4.46% to 137.9 while the float index calculated on the basis of real transaction went downhill 0.35 points or 0.94% to 37.27. Total of Rs. 2,823,647,321 turnover was realized during the review period from 10,267,018 units of share traded via 31,100 transactions.

The accompanying figure depicts the sector-wise distribution based on the total volume of trade. As usual commercial banks accounted for the heavy volume of trade with 81.33% of total trade. Hydropower sector occupied 6.50% while insurance sector constituted 3.62% and rest of the sectors covered the remaining. 

Technically, the Simple Moving Average (SMA) has shown a sluggish movement as Nepse Index has been outcast by 30 Days SMA. Index has shown sideways movement for upcoming sessions for confirming the trend.

Chitrakar is a Stock Analyst with Jamb Technologies Pvt Ltd.