Market continues to tumble further

Nepal Stock Exchange (Nepse) index (-2.35 percent) continued to tumble for the second consecutive week as all the sub-indices ended on a negative note. The market shed 11.18 points with the benchmark index closing at 463.45 points on Thursday.



Despite an increase in market volume (+12.93 percent), the current turnover can still be considered insufficient to indicate positive investor sentiment. [break]



The ´Others´ sub-sector (-2.80 percent) booked the highest loss among the sub-indices this week, as the share price of Nepal Doorsanchar Company (-Rs 13) plummeted.



Similarly, the Commercial Banking sector (-2.75 percent) continued its downtrend as the share prices of key banks like Standard Chartered Bank (-Rs 180), Nabil Bank (-Rs 125), and DCBL Bank (-Rs 13) shed value.



The Development Banking sector (-1.88 percent) plunged, dropping the index further as the share price of Siddhartha Development Bank (-Rs 14) and Business Development Bank (-Rs 13) depreciated.



The Insurance sector (-1.88 percent) posted negative returns as well with Life Insurance Company Nepal (-Rs 85) posting a substantial price drop. Prabhu Finance (+Rs 44) and Royal Merchant & Finance (+Rs 22) ended among the top gainers list.



However, the Finance sector (-1.16 percent) failed to move to the green zone. Patan Finance (-Rs 77), and Crystal Finance (-Rs 25) were among the top losers list. The Hydropower sector (-0.32 percent) followed, as the share prices of National Hydropower Company (-Rs 2), and Chilime Hydropower Company (-Rs 30) nosedived.



Nepal Bangladesh Bank (-Rs.9) posted the highest turnover of the week at Rs 25,186,185 followed by Lumbini Bank (-Rs 18) posting a turnover of Rs 13,135,571.



Amongst other highlights, Nepal Rastra Bank has halted the upgrade process for financial institutions until further notice. This has affected the anticipated upgrade of Sanima Bikas Bank and Nepal Share Markets and Finance.



On the declaration front, Kasthamandap Development Bank announced 1:1 right shares. Subhechha Bikas Bank is closing its book on June 29 to issue 1:1.1 right shares. Similarly, Merchant Finance is closing its book on July 2 for 1:3 right issue and Citizens Bank International is closing its book on July 15 to issue 1:1 right shares.



On the IPO side, application for Swastik Merchant Finance starts on July 2.



Forecast



The ongoing market uncertainty due to current non-resolving scenario has discouraged newer market participants from entering the market. Technical analysis indicators signal a continuation of the bearish trend for the coming week. However, some reversal can be expected.

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