Nepal | November 26, 2020

Nepse drops as investors await Q1 results

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A slight gain in the mid-week failed to prop up the Nepal Stock Exchange (Nepse) index in the trading week between November 1 and 5, causing the local bourse to record a drop of 0.58 per cent or 9.59 points.

“While some short-term investors looked to capitalise on the surge witnessed last Wednesday, when the market had reopened after the Dashain holidays, most are awaiting the financial results of the first quarter and dividend announcement of the listed companies,” said a market analyst, explaining the market movement.

According to him, the market movement may remain muted till the festive season is over.

Share investors had flocked to the banking stocks when the market had reopened last Wednesday, prompting the benchmark index to gain 41.2 points that day. But the benchmark index dropped the following day on profit-booking — a trend that continued in the start of the review week.

Opening at 1,645.68 points on Sunday, the Nepse index had dropped by 4.72 points by the time of closing. It shed another 3.33 points on Monday.

The local bourse, however, recouped the loss of the earlier day by edging up 5.41 points on Tuesday. The positive sentiment did not last though and Nepse dipped by 2.40 points on Wednesday and fell by 4.55 points to close the trading week at 1,636.09 points.

The sensitive index, which measures the performance of class ‘A’ stocks, fell by 1.12 per cent or 3.67 points to 324.37 points. The float index that gauges the performance of shares actually traded also slipped by 0.92 per cent or 1.06 points to close the trading week at 114.11 points.

Altogether more than 40 million shares of 214 companies were traded through 161,070 transactions that amounted to Rs 12.22 billion.

The traded amount was a whopping 112.07 per cent higher compared to the total weekly turnover of Rs 5.76 billion recorded in the preceding week, when 19.69 million shares of 195 companies had changed hands through 84,527 transactions.

It has to be noted though that the market had opened for only two trading days in the preceding week, compared to the normal five days in the review period. Hence, a breakdown reveals that the average daily turnover actually fell 15.17 per cent to Rs 2.44 billion against Rs 2.88 billion of the past week.

Among the subgroups, commercial banks had the highest weightage of 33.34 per cent in the total weekly turnover, followed by hydropower subgroup with 21.39 per cent, microfinance with 12.28 per cent, others with 8.27 per cent, non-life insurance with 6.39 per cent, life insurance with 5.73 per cent, development banks with 4.02 per cent, finance with 2.27 per cent, manufacturing with 2.15 per cent, trading with 0.41 per cent, hotels with 0.31 per cent and mutual funds with 0.30 per cent.

The remaining share was occupied by promoter shares (3.10 per cent), debentures (0.05 per cent and preference shares.

Eight of the subgroups landed in the green in the review period, while the remaining four witnessed losses in the week.

The trading subgroup led the gainers, with the sub-index soaring by 10.95 per cent or 121.09 points to 1,226.44 points.

It was followed by microfinance that jumped 3.17 per cent or 81.53 per cent to 2,655.42 points. Hydropower advanced by 3.06 per cent or 42.50 points to 1,432.43 points.

The sub-index of mutual funds went up by 2.35 per cent or 0.25 point to 10.89 points, while that of others by 2.02 per cent or 21.41 points to 1,080.84 points.

Non-life insurance rose by 1.36 per cent or 109.69 points to 8,190.5 points.

Finance landed at 864.53 points and hotels rested at 1,757.35 points after witnessing muted gains of less than one per cent.

Banking, on the other hand, slumped by 2.94 per cent or 39.39 points to 1,301.54 points.

Development banks followed with a drop of 1.40 per cent or 29.87 points to 2,106.03 points.

Manufacturing closed at 3,034.09 points and life insurance settled at 9,705.14 points — both slipping by less than one per cent.

Meanwhile, Prime Commercial Bank (PCB) had the highest weekly turnover of Rs 660.43 million. It was followed by Api Power Company with Rs 461.55 million, Shiva Shree Hydropower Ltd (SSHL) with Rs 416.10 million, Hydorelectricity Investment and Development Company Ltd (HID- CL) with Rs 382.26 million and Arun Kabeli Power Ltd (AKPL) with Rs 376.77 million.

General Insurance Company Nepal Ltd recorded 10,236 transactions, which was the highest among the listed companies in the review week. Reliance Life Insurance with 7,311 transactions, PCB with 4,557 transactions, HIDCL with 4,323 transactions and Api Power with 4,102 transactions rounded up the top five in this category.

SSHL was the forerunner in terms of trading volume with 2.73 million of its shares changing hands, followed by PCB with 1.91 million shares, Api with 1.89 million shares, HIDCL with 1.68 million shares and AKPL with 1.39 million shares.

Source: Nepse

A version of this article appears in print on November 08, 2020 of The Himalayan Times.

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