Nepse in a correction mode

KATHMANDU, Aug 28:

Nepal Stock Exchange (Nepse) index dropped a nominal 0.91 point this week to close at 1,183.76 points on Thursday -- the last trading day of the week.

Though the market was logging gains over the past few weeks, propelling the benchmark index to a new high, it started retreating from the very first trading day this week.

Nepse index had climbed to all time high of 1,200.92 points on August 20.

The market was on a bullish trend for the past few trading days after Nepal Rastra Bank (NRB) introduced on July 23 a new provision through the Monetary Policy for Fiscal Year 2015/16, requiring bank and financial institutions (BFIs) to increase minimum paid-up capital by as much as four times over the next two years.

After climbing to a new high, the benchmark index, however, was on a correction course in recent trading days except on Thursday when it went up by 8.19 points.

Stock brokers attribute the profit-booking sentiment of investors for the 'slight correction' in recent days. "It is obvious for investors to sell their securities following hefty rise in share prices. Some more correction can be expected in the coming days," Baddri Prasad Phuyal, a broker who runs Kumari Securities Pvt Ltd, told Republica.

Phuyal said recent political tension has also affected the stock market. "Investors' mood was soured by the Tikapur incident and protests in different parts of the country," he added.

Insurance group was the biggest gainer of the week as its sub-index shot up by a whopping 421.72 points to close at 5,179.93 points. Manufacturing and Processing group followed suit, with its sub-index gaining 104.68 points to close at 2,020.82 points. Development Bank and Hydropower sub-indices jumped up by 40.49 points and 11.49 points, respectively, to settle at 919.81 points and 2,126.68 points. Finance group also ended the week on green zone, gaining 3.19 points to settle at 553.21 points. Others and Hotels group, however, saw their sub-indices fall by 45.81 points and 41.16 points, respectively, to 764.81 points and 2,015.09 points. Banking, the heavyweight group in the secondary market, also ended 25.87 lower to end the week at 1,122.13 points. Trading group remained unchanged at 206.51 points.

A total of 6.92 million units of shares of 169 companies worth Rs 2.59 billion were traded in the market through 16,134 transactions. The turnover is 37.57 percent lower compared to figures of last week.

Everest Bank Ltd remained at the top of the list of companies in terms of turnover (442.17 million), while Siddhartha Investment Growth Scheme I led the table of companies in terms of number of shares traded (1.54 million). Similarly, Prabhu Bank Ltd topped the list of companies in terms of number of transactions (821).

Source: Republica