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September 2014 Stock Taking

Published on: 2014-09-17 00:00:00     517 times read    0  Comments
--By Bikram Chitrakar
The Nepali bourse cooled down after reaching a high of 1083.55 as selling pressure ruled the market. The benchmark Nepse index plummeted 61.35 points or 5.71% to close at 1013.6 while session’s high was on 21st July with 1083.55 and lowest on 18th August with 1013.25. 
One reason for the big retreat is the profit booking spree. Analysts say as this is a regular correction, the investors need not panic. 
Apart from the investors’ changed sentiment, no major events have been reported during the period. 
However, the experience of the recent days has further heightened the urgency to adopt centralized clearing system. The daily transaction volume has grown to billion rupees, but the CDS and Clearing Limited  that is set up to develop centralized clearing system is still following manual clearing system. 
Performance by Sector
Hydropower sector descended by 336.37 points or 10.88% during the period to rest at 2754.6. Similarly, banking sector lost 78.11 points or 7.86% to come down to 915.39. Insurance sector that was making large gains for consecutive long period has erased 4.01 points to 4313.17 during the review period while finance sector skid 8.12 points or 1.53% to close at 521.25. Other sector lost a marginal 0.78% to rest at 751.89 while trading sector remained unchanged. 
Sensitive index that measures the performance of ‘A Category’ stocks plunged 14.41 points or 6.24% to close at 216.62 while float index plummeted 4.56 points to 71.5. The market capitalization at the end of the review period was Rs 1034.93 billion which is 5.72% lower than in the beginning. The the total turnover too has recorded double digits drop of 43.03%.
During the review period, commercial bank group ruled the market holding 56.82% share of the total trade.  Development bank group occupied 14.88% while hydropower sector accounted for 13.73% with the rest of the sectors covering the remaining volume. 
Technically, the Simple Moving Average (SMA) has descended as 30 days SMA overruled the trend. Nepse index is moving sideways after the downside move and stayed neutral for new confirmation signal. The pivot analysis shows that the index will hover around 1083.74 and 1048.58 in the coming weeks while the probable range in case of further downfall is between 1048.22 and 994.13.  
Chitrakar is a freelance Stock Analyst.

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