Nepse enters correction phase

Kathmandu, January 25

After surging by almost 175 points since the first week of January, the country’s sole secondary market has gone into correction mode, with the local bourse bearing losses in the trading week between January 19 and 23.

Share market investors said that the market had faced buying pressure earlier as banks and financial institutions are releasing their results of the second quarter of this fiscal year.

“After a surge of over 150 points, the secondary market has undergone correction, which is normal,” said Radha Pokharel, chairperson of Nepal Pujibazar Laganikarta Sangh.

While the market has started facing some liquidity crunch, Nepse will surely recover in the coming days, she added.

Nepal Stock Exchange (Nepse) index dropped by 0.97 per cent or 12.75 points in the review week to below the threshold of 1,300 points.

However, weekly turnover surged by 28.1 per cent compared to the previous week to reach Rs 8.55 billion. In the previous week, the market had witnessed transactions worth Rs 6.67 billion. The trading volume also accelerated to 25.10 million stocks changing hands this week from 21.19 million in the previous week.

The secondary market had opened on Sunday, with the benchmark index at 1,310.23 points. It had soared by 33.43 points by the end of the first trading day. On Monday, the market saw some of the gains wiped out, as Nepse fell by 26.54 points. On Tuesday, it recovered some of the losses of the previous day by rising 3.36 points. However, the local bourse dropped by 7.05 points on Wednesday and 15.95 points on Thursday to close the week at 1,297.48 points.

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10.25% Prabhu Bank Debenture 2086



Source: Nepse

In the review week, life insurance, non-life insurance, mutual funds and finance sub-indices managed to remain in the green zone.

Life insurance sub-index was the biggest gainer of the week, soaring by 7.67 per cent or 513.69 points to 7,214.15 points due to the share price of Nepal Life Insurance Co jumping by Rs 61 to Rs 1,100.

Similarly, non-life insurance subgroup ascended by 4.06 per cent or 212.21 points to 5,440.27 points as share value of Himalayan General Insurance Co rose by Rs 25 to Rs 355, among others.

The mutual funds sub-index went up by 1.39 per cent or 0.14 point to 10.19 points and finance subgroup inched up by 0.02 per cent or 0.16 point to 665.17 points.

Meanwhile, trading subgroup was the biggest loser of the week, declining by 8.88 per cent or 77.15 points to 791.24 points, weighed down by Salt Trading Corporation slumping by Rs 203 to Rs 2,397.

Hotels sub-index dropped by 3.34 per cent or 69.01 points to 1,997.98 points. It was due to the share price of Oriental falling by Rs 13 to Rs 514.

Likewise, hydropower subgroup descended by 2.79 per cent or 28.97 points to 1,006.35 points and microfinance sub-index fell by 2.59 per cent or 53.55 points to 2,015 points.

Banking — the subgroup with the highest weightage in the secondary market — dropped by 1.99 per cent or 23.12 points to 1,140.19 points as share value of Himalayan Bank fell by Rs 12 to Rs 767.

The development banks subgroup went down by 1.89 per cent or 33.60 points to 1,747.66 points. Others subgroup descended by 1.88 per cent or 12.84 points to 672.07 points and manufacturing subgroup fell by 1.15 per cent or 28.87 points to 2,480.95 points.

In the review week, Global IME Bank topped the charts in all three categories — trading volume, number of transactions and turnover — with 2,629,000 of its shares changing hands through 6,522 transactions worth Rs 806.23 million.

Nepal Life Insurance Co with Rs 485.50 million, Himalayan Distillery with Rs 482.73 million, NIC Asia Bank with Rs 273.30 million and Shivam Cements with Rs 265.51 million were the other companies with high turnover.

NCC Bank with 1,061,000 shares, Nepal Bank with 862,000 shares, Prabhu Bank with 770,000 shares and Surya Life Insurance with 600,000 shares rounded up the top five in the weekly trading volume category.

Meanwhile, Nepal Life Insurance Co with 2,891, Surya Life Insurance with 2,464, NCC Bank with 2,342 and Shivam Cements with 2,167 transactions were other firms with highest number of transactions.