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April 2015 Stock Taking

Published on: 2015-04-20 00:00:00     1458 times read    0  Comments
Most of the stocks turned red during the review period (Feb 18 - March 19) pushing the index to nearly two months low. The Nepse index closed in red losing 15.03 points or 1.53% to settle at 967.62. The index touched highest level on 9 March with 988.77 and the lowest was 959.14 on 16 March. 
 
--By Bikram Chitrakar
 
Among nine sub-sectors, seven turned red in the period while only two sectors were able to post growth. Political development and delay in dialogue between political parties is pointed as the prime factor for the recent downfall. 
 
Also the issue of fake share certificates has moved the investor sentiment as they rushed either to sell or transfer the BT shares. Nepal Stock Exchange has formed a team to investigate the issue. 
 
Appointment of new governor of Nepal Rastra Bank was also in the focus of the investors. Rules and regulation of the central bank affect the stock market widely as around 40 percent of the total turnover of the exchange is accounted for by shares of commercial banks and other financial institutions. 
 
Downfall of the market while the publication of third quarter results from companies is around corner indicates that the market will rise only if the actual results come positive and such results will start coming only after mid-April. Hence the market is likely to remain subdued till them. It also indicates that the presence of big institutional investors – mutual funds and insurance companies - has not changed the unpredictable behaviour of the market. 
 
In the review period, total turnover of Rs 4.5 billion was made with 33,496 transactions. This turnover is down by 23.69 percent compared to the previous period. 
 
Performance by Sector
Insurance sector lost 125.18 points or 2.93% to rest at 4154. Commercial banking sector too plummeted 1.84% along with 1.15% down in development bank. Hotel sector lost 21.52 points or 1.05% to close at 2024.69. Finance, others and hydropower sector were down by small figures. However, trading sector accelerated 5.85 points or 3.06% to rest at 196.93 and manufacturing sector recorded a growth of 28.51 points or 2% to 1455.78. 
 
Sensitive index that reflect the performance of “A Category” stocks as classified by Nepal Stock Exchange plunged down 3.01 points or 1.44% to 205.75 while the float index descended 0.46 points or 0.67% to close at 68.17.
 
The total volume of trade was concentrated primarily in three sectors, i.e. commercial bank, development bank and insurance. Commercial bank occupied 45.76% of total trade while development bank and insurance shared 20.70% and 20.46% respectively. Remaining portions were covered by rest of the sectors. 
 
Technically, simple moving average (SMA) has dominated index in short term as monthly average crossed over the index. The Index has shown sluggish movement though pick and test at the level of 970 cannot be ruled out. As projected by pivotal analysis, Nepse will move around 978.19 to 993.01 in case of upward move and in the level of 984.53 to 969.71 in case of downward move.
 
 
Chitrakar is a freelance Stock Analyst.

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