Though the market started the week with a positive rally after closing in green territory last week, it couldn´t sustain as selling pressure mounted in the market. [break]The market shed points throughout the week before closing the last day of the trading week on a positive note led by the Insurance Sector. The Insurance sector gained 22.12 points on the day.
The Insurance sub-index (+6.27 percent) was the biggest gainer of the week as share prices of Lumbini General Insurance (+Rs 25), Asian Life Insurance (+ Rs 30) and Nepal Life Insurance (+ Rs 122) soared. The Hotels sub-index (+3.26 percent) also went up helped by rise in share prices of Soaltee Hotels (+Rs 13) and Oriental Hotels (+Rs 1). The Hydropower sector followed suit, as rise in share prices of Butwal Power Company (+Rs 25) and Chilime Hydropower Company (+Rs 29) pushed its sub-index in the green zone. Similarly, the Commercial banking sub-index (+1.04 percent) continued its upward journey as share prices of Sanima Bank (+Rs 18) and Siddhartha Bank (+Rs 10) increased. The Development banking sub-index (+0.31 percent) also managed to end in the green zone this, as share prices of First Microfinance Development Bank (+Rs 32) and City Development Bank (+ Rs 25) went up.
However, the ´Others´ sub-index ended in red territory this week as share price of Nepal Telecom (-Rs 11) plummeted. The Finance sub-index (-0.06 percent) followed suit as as share price of Hama Merchant and Finance (-Rs 38) and Narayani National Finance (-Rs 5) decreased.
Amongst news and highlights, Securities Board of Nepal (Sebon) has granted license to NMB Bank to operate mutual fund. Sebon has already issued such license to Siddhartha Bank and Nabil Bank. The high-level financial coordination committee has decided to initiate merger between two public sector banks -- Rastriya Banijya Bank and NIDC Development Bank. Manakamana Development Bank, Hama Merchant & Finance, NDEP Development Bank, Nepal Consumer Development Bank and Imperial Finance have agreed in principal to undergo merger. They are likely to sign a Memorandum of Understanding (MOU) soon. Commerz and Trust Bank has appointed four merchant bankers to issue its 6 million units of ordinary shares to the general public in the near future.
As for company announcements, Nepal SBI Bank has proposed to distribute 12.5 percent bonus shares and 5 percent cash dividend. The newly-listed Janata Bank has proposed to distribute 3.68 percent cash dividend to its shareholders. Global IME Bank has also proposed to distribute 10 percent bonus shares and 3 percent cash dividend. Similarly, Reliable Finance has proposed to distribute 8.86 percent cash dividend and 8.41 percent bonus shares to its shareholders. All the above benefits are subject to approval from NRB and their respective annual general meetings.
Forecast:
The market is an over buy situation. Technical analysis indicators signal a slight downward pressure. Some retracements, however, cannot be denied.
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