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February 2015 Stock Taking

Published on: 2015-03-09 00:00:00     1029 times read    0  Comments
Nepal’s secondary market turned little green with hopes that agreement between major political parties on contentious issues of new constitution was underway. The Nepse index accelerated 66.19 points or 7.38 per cent to close at 962.80. The session’s high was on 19 January, 2015 with 976.45 points and low was on 23 December, 2014 with 877.21 points.
 
--By Bikram Chitrakar
 
Optimism for an agreement between major political forces on contentious issues of the proposed new constitution fuelled the market most of the time during the review period. With news of such an agreement in the offing, the market recorded the highest daily gain of 30 points on 19th January 2015. 
 
The listed companies started from mid-January to publish the second quarter report for the fiscal year and there was optimism from early January that these reports were bringing good news for the investors. This too helped to bolster the market. As a result, the total turnover for the period was 72.40 per cent higher than that of the previous period.
 
Low interest rates and ray of hope for stable political directions played the key role in recent market growth. Nepali bourse has always been sensitive to political events as well as to the financial conditions of the listed companies. However, as the market has already climbed to nearly five months high, advisable strategy for the time being is to wait and watch for further signals
 
Performance by Sector
Development bank added 88.01 points or 13.18 during the period to rest at 755.87. Insurance sector jumped up from 385.36 points or 10.27 per cent to 4136.6. Finance sector surged 8.16 per cent followed by 7.13 per cent up in manufacturing sector and these sectors rested at 513.04 and 1374.42 points respectively. Commercial banking sector moved higher by 6.73 per cent, hydropower sector gained 5.53 per cent and others sector escalated by 4.60 per cent. However trading sector receded 32.89 points or 4.60 per cent to close at 747.19 points.
 
Sensitive index that reflects the performance of blue chip companies listed in Nepal Stock Exchange gained 12.85 points or 6.67 per cent to close at 205.37 while float index inched higher by 4.68 points or 7.49 per cent to 67.17. As shown by the sector-wise distribution, the most of the total volume of trade for the period was captured by commercial bank (55.94 per cent). Insurance sector accounted for 18.41 per cent, development bank 12.13 per cent and remaining sector made up the rest. 
 
Technically, Nepse index has dominated over the Simple Moving Averages (SMAs). In the latest period under review, the short term (30 days) SMA has crossed the long term (200 days) SMA from below.  Hence remain on look out for a new confirmation signal to identify the next direction.
 
 
Chitrakar is a freelance Stock Analyst.

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