NEPSE Weekly: Market freefall continues

NEPSE Weekly: Market freefall continues
Republica, 28-Mar-10

The market witnessed yet another week of depression as the Nepal Stock Exchange (Nepse) index (-2.04 percent) ended the week in the red zone. The benchmark index closed at 466.09 points. The market remained closed for two trading days due to public holidays resulting in a sizable decrease in the total turnover of Rs. 84,666, 231 (- 29.83 percent) compared to previous week.

The Commercial Banking sub-index (-2.62 percent) descended as NMB Bank (-Rs 3) shed value. The loss can be attributed to the further public issue of the bank which has been extended till April 25. Despite Madhyamanchal Gramin Bikas Bank (+Rs 45) which declared 1:5 right shares and Gurkha Development Bank (+Rs 9) booking top gains, the Development Banking sector (-1.75 percent) ended the week in the red zone with decrease in the share prices of Public Development Bank (-Rs 6) which announced 1:0.4 right shares.

Likewise, the Finance sector (-2.98 percent) posted major decline as Lalitpur Finance (-Rs 129) and Nepal Housing and Merchant Finance (-Rs 64) topped the losers chart. Merchant Finance Company (+Rs 80) which declared 1:3 right shares registered the highest turnover. Decline in share prices of National Hydropower (-Rs 13) impacted the hydropower sector (-4.62 percent). Similarly, the Insurance sector (-0.62 percent) went down as Lumbini General Insurance (-Rs 9) fell. Likewise, the ´Others´ sub-index (-0.22 percent) also plunged as Nepal Doorsanchar Company shed value.

Among other highlights, Dr Yuva Raj Khatiwoda has been appointed as the new governor of Nepal Rastra Bank. Infrastructure Development Bank (-Rs 22) has changed its book closure date to March 23 for 10 percent bonus shares. Malika Bikas Bank (515,750 units) and Union Finance (51,750 units) will be auctioning their right shares. Everest Finance and Butwal Finance declared 1:1.5 and 1:1.4 right shares respectively.

Likewise, Premier Finance and General Finance too declared 2:1 right shares and 1:1 right shares. Nepal Finance declared 30 percent bonus shares while Universal Finance (-Rs 8) declared 10 percent bonus shares. Also, Navadurga Finance (-Rs 25) announced 15 percent bonus shares while Salt Trading Corporation declared 15 percent bonus shares and 5 percent cash dividend.

On the IPO front, Agricultural Development Bank is issuing ordinary shares worth 9,600,000 units from April 4.

Technical analysis tool further validates a bearish trend for the coming month. The market in an oversold stage signals a potential entry point for long term investors.