Though the Nepal Rastra Bank -- the central monetary authority - tried to intervene the market by auctioning off 100 kg of gold on Tuesday, domestic bullion market saw huge upheaval, pushing the price of the precious yellow metal up to a new high.[break]
Currency
Nepali rupee gained Rs 1.09 against a dollar this week, as the greenback weakened against Indian currency with which the Nepali rupee is pegged. On Friday, a dollar was exchanged at Rs 113.19.
Nepal Rastra Bank had set the exchange rate of a US dollar at Rs 72.20 when the market opened on Sunday. As dollar saw drop in demand, rupee gained 60 paisa on Monday. However, Nepali currency weakened nominally by 15 paisa to Rs 71.75 per dollar on Tuesday.
On Wednesday, rupee gained Rs 1.05 against a dollar, compared to Tuesday. But it suffered loss again, shedding 41 paisa to Rs 71.11 on the market closed on Thursday.
Similarly, rupee gained Rs 1.12 against a pound sterling over the week. On Thursday, a pound sterling was exchanged at Rs 113.19.
Bullion
The price of gold continued to hit new high and recede this week amid skyrocketing price of gold in the international market.
Though supply of the yellow improved in the market after Nepal Rastra Bank sold 100 kg of gold to traders through auction, price has soared as dealers have set different price in the market.
Traders themselves agree that consumers are paying at least Rs 1,000 per 10 gram higher than the international price. NRB had set the minimum price, adding Rs 1,000 per 10 gram on international price for the auction. NRB had set the minimum price of gold at Rs 31,099.69 per 10 gram. Traders quoted the maximum price of Rs 31,980 per 10 gram during Tuesday´s auction.
After a gap of almost two months, Nepal Gold and Silver Dealers´ Association (Negosida) resumed fixation of gold and silver prices. In the lack of uniformity in prices declared by Neogsida and Nepal Gems and Jewelry Association, traders, however, continued to fix the price on their own.
Traders sold gold for at least Rs 31,655 per 10 grams on Sunday. The price went up by Rs 25 to Rs 31,680 per 10 grams on Monday and Tuesday. The price declined by Rs 270 per 10 grams on Wednesday, but became dearer to Rs 32,580 per 10 grams a day later. The price came down by Rs 130 to Rs 32,450 per 10 grams on Friday.
The price of silver also climbed to Rs 578 per 10 grams over the week.
Stock
The Nepal Exchange Stock (Nepse) index gained value throughout the week after dropping points initially to reach 411.82 points, an impressive gain of 8.67 percent this week. However, the total turnover decreased by 41.79 percent as compared to last week due to low trading of promoter shares. Most stocks have managed to perform relevantly well even after book closures, as buying pressure in the market continued to pull the market up.
The Others Sector (3.28 percent) posted the highest gain among the sub-indices as the share price of Nepal Telecom (+Rs 14) appreciated. The Commercial Bank sector (3.12 percent) followed suit as Bank of Kathmandu (+Rs 40), Nepal Investment Bank (+Rs 34) and Citizen Bank (+Rs 14) gained value this week. The Hydropower (1.12 percent) sub-index also went up as the share prices of Arun Valley Hydro Development (+Rs 38) and Chilime Hydro Power Co (+Rs 14) rose.
However, the Finance sub-index (-2.03 percent) lost considerably, as share prices of Prabhu Finance (-Rs 73), Standard Finance (-Rs 26) and Butwal Finance (-Rs 50) shed value. The Insurance Sector (-0.69) also did not fare better as Surya Life Insurance Company (-Rs 67) ended as the top loser this week. Meanwhile, Sewa Development Bank (-Rs.43), Manakamana Development Bank (-Rs.14) and Gurkha Development Bank (-Rs.28) pulled the Development Sector (-0.52 percent) down.
Amongst news and highlights, Securities Board of Nepal (SEBON) has implemented the Central Depository System regulations from October 6, following its approval by the Ministry of Finance. Arun Valley Hydropower´s share trading was halted for two days after it distributed 25 percent cash dividend to its promoters without SEBON´s approval. It has also been accused of trading with insider information as it had withheld benefit declarations that could have affected the secondary market. However, its share trading resumed after it publicly announced to give out 10 percent bonus shares and 37 percent cash dividend from the fiscal year end earnings.
On the declaration front, NCM Mutual Fund is distributing 15 percent cash dividend to its unit holders. DCBL Bank has decided to give 10 percent bonus shares. Similarly, Global Bank and NIC Bank have announced to give 5 percent and 26.32 percent cash dividend respectively. Mahalaxmi Finance Ltd has decided to distribute 7.75 percent cash dividend from the earnings of fiscal year 2009/10. Chimmek Bikash Bank is holding its 9th AGM on October 31. It is giving away 50 percent bonus shares for which it is closing its book from October 12 to 30. KIST Bank is holding its 9th AGM on October 30. It has announced to give 5 percent cash dividend for which it is closing books from October 12 to 30.
ICFC Finance is holding its 7th AGM on October 31. The company has proposed to give 15 percent cash dividend for which it is closing book from October 10 to 31. United Finance Ltd is closing its books from October 11 to 27 for its 16th AGM scheduled on October 27. IT has proposed to give 13.16 percent cash dividend. Nirdhan Uthhan Bank is issuing 2:1 right shares from October 22 to November 25. Likewise, Reliable Finance is closing its book October 25 for 1:1 right issue.
Forecast: Technical analysis indicators signal short term uptrend for the coming week as the market has surpassed the oversell position and buying pressures have increased in key sectors.
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