Nepal | September 28, 2020

Secondary market enters ‘markup phase’

Himalayan News Service
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Kathmandu, January 18

With the secondary market’s shift from ‘accumulation phase’ to ‘markup phase’, the Nepal Stock Exchange (Nepse) index surged by eight per cent or 97.12 points past the psychological threshold of 1,300 points after nearly eight months in the trading week between January 12 and 17.

‘Accumulation phase’ occurs after the market has bottomed and the investors and early adopters begin to buy, figuring the worst is over. ‘Markup phase’, on the other hand, occurs when the market has been stable for a while and moves higher.

Prakash Rajhaure, an independent stock analyst, said the share market has entered a bullish trend after the government expressed its commitment to promote the secondary market. “But, this is not the only factor, as the market has completed its ‘accumulation phase’.”

“While the positive statements by the finance minister and chairperson of Securities Board of Nepal recently have boosted investor sentiment, the current market movement is cyclical upsurge,” he explained.

In the review week, sensitive index ascended by 7.04 per cent or 18.61 points to 282.88 points and float index increased by 2.99 per cent or 2.86 points to 92.86 points.

The weekly turnover surged by 57.9 per cent compared to the previous week to Rs 6.67 billion. In the previous week, the market had witnessed transactions worth Rs 4.22 billion. The trading volume also jumped from 14.68 million stocks traded in the previous week to 21.19 million stocks changing hands this time around.

The secondary market had opened on Sunday at 1,213.12 points. It had soared by 42.61 points by the end of the first trading day. On Monday, market increased by 15.14 points, but dropped by 7.48 points the next day. However, the index more than recovered the loss on Wednesday by advancing 20.85 points and jumped by 26 points on Thursday to close the week at 1,310.23 points.

Trading subgroup was the biggest gainer of the week, soaring by 28.74 per cent or 193.84 points to 868.39 points owing to the share price of Salt Trading Corporation surging by Rs 631 to Rs 2,600 and Bishal Bazar Company by Rs 323 to Rs 2,142.

The finance subgroup ascended by 13.66 per cent or 79.91 points to 665.01 points, with the share price of ICFC Finance up Rs 35 to Rs 187.

Likewise, life insurance sub-index went up by 12.29 per cent or 733.32 points to 6,700.76 points due to share price of Nepal Life Insurance Co rising by Rs 79 to Rs 1,039.

Non-life insurance subgroup gained 11.13 per cent or 523.76 points to 5,228.06 points. Everest Insurance Co went up by Rs 49 to Rs 328, among others.

The microfinance sub-index climbed 10.87 per cent or 202.97 points to 2,069.38 points as the share value of Chhimek Laghubitta Bikas Bank went up by Rs 61 to Rs 917.

Moreover, hotels sub-index rose by 8.66 per cent or 164.85 points to 2,066.99 points. It was due to the share price of Soaltee gaining Rs 15 to Rs 211 and Taragaon Regency by Rs 26 to Rs 306.

The hydropower subgroup ascended by 8.45 per cent or 80.67 points to 1,035.32 points, with share value of hydropower companies like Chilime up Rs 48 to Rs 420 and Upper Tamakoshi by Rs 11 to Rs 249.

Banking — the subgroup with the highest weightage in the country’s only secondary market — soared by 7.21 per cent or 78.29 points to 1,163.31 points. Share price of Nabil increased by Rs 35 to Rs 751, Nepal Investment by Rs 11 to Rs 409 and Standard Chartered Nepal by Rs 70 to Rs 635.

The mutual funds subgroup was up 6.01 per cent or 0.57 point to 10.06 points. Likewise, manufacturing subgroup jumped by 4.59 per cent or 110.05 points to 2,509.82 points on the back of share price of Unilever Nepal going up by Rs 250 to Rs 19,300.

The others sub-index added 4.19 per cent or 27.58 points to 684.91 points as Nepal Telecom’s share price rose by Rs 19 to Rs 639.

In the review week, NIC Asia Bank was the leader in terms of number of transactions and weekly turnover, recording a total of 1,941 transactions worth Rs 267.63 million.

Shivam Cements with Rs 225.36 million, Nepal Life Insurance Co with Rs 222.62 million, Himalayan Distillery with Rs 210.94 million and Citizen Investment Trust with Rs 169.76 million rounded up the top five companies with highest weekly turnover in the review period.

In terms of weekly trading volume, Prabhu Bank was the forerunner with 673,000 of its shares changing hands. It was followed by Kumari Bank with 622,000 shares, NCC Bank with 605,000 shares, NIC Asia Bank with 582,000 shares and Nepal Bank with 544,000 shares.

Meanwhile, Nepal Life Insurance Co with 1,695, Grameen Bikas Laghubitta Bittiya Sanstha with 1,661, Shivam Cements with 1,645 and NMB Bank with 1,519 transactions were the other companies with high number of transactions.

A version of this article appears in print on January 19, 2020 of The Himalayan Times.

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