Stocks of many companies are in the bullish zone despite bearish market trend; have you invested in any of those companies?

~Rishab Agrawal

The year 2018 has been a year with lots of ups and downs for the securities market. The market was influenced by a lot of things which are common in the market like quarterly reports, dividends, rights etc. However it was also influenced by some uncommon events like online trading controversy, protest for growth of stock market, interest rate wars between commercial banks, new NRB regulations etc.

Amidst all such events, the year is looking to end on a positive note with NEPSE gradually flourishing and investors getting more security and accessibility in the securities market. However, would it be correct to say that the bullish trend is here? Will we be entering the New Year with the bull on our side?

Generally, bullish trend is said to have arrived if prices of shares grow by 20% or more from a recent low while a change of 10% or less is referred to as a correction. To analyze if the market is supporting the wake of a bullish trend or is acting against it, we have compiled a list of companies from banking and insurance sector and compared their latest prices with their recent low closing price to check if the most popular stocks among investors have entered the bullish phase or are still in correction phase.

(*All of the low closing prices of the companies have been calculated after consideration of their respective bonus and rights)

Commercial Banks

On comparing the recent low prices with the latest prices of commercial banks, 10 banks have entered the bullish trend after posting a growth of 20% or more while 12 banks are still in correction phase after posting a growth of 10% or less. 5 banks have a growth of more than 10% but less than 20%. The highest growth was posted by Prabhu Bank (PRVU) at 43.18% while the lowest was posted by Nabil Bank (NABIL) at 2.13%.

Life Insurance

Among life insurance companies, all except for Life Insurance Corporation Nepal (LICN) have grown by more than 20% from a recent low. Surya Life Insurance (SLICL) has posted the highest growth at 50.60% while LICN las posted the lowest at 14.38% although it has passed the correction phase. As per this analysis, Life Insurance sector has supported the rise of the bullish trend.

Non-Life Insurance

13 Non-Life Insurance companies out of 15 have posted a growth of more than 20% from a recent low. Himalayan General Insurance (HGI) and Rastriya Beema Company (RBCL) have posted a growth of 19.44% and 16.85% respectively. The highest growth among non-life insurance companies was posted by Everest Insurance Company (EIC) at 70.47%.

From the analysis above, most popular stocks among investors have supported the bull trend however some big names are still is correction phase while some are on the verge of entering the bullish trend. If the market continues to go in this direction, the investors will be entering the New Year with a long overdue bull on their side. It wouldn’t be wrong to expect a bright 2019 for securities market.