Despite an increase in market volume (+6.97 percent), the current turnover can still be considered insufficient to indicate positive investor sentiment as promoter shares accounted for 9.47 percent of the total trade volume. [break]
Furthermore, the ongoing market uncertainty due to the current non-resolving political scenario has discouraged new entrants from entering the market.
The Hydropower sector (-5.28 percent) continued to shed value for the third consecutive week as the share prices of Butwal Power Company (-Rs 110) and Arun Valley Hydropower Development Company (-Rs 3) declined.
The Development Banking sector (-2.81 percent) followed suit, as Gurkha Development Bank (-107) and Sewa Bikas Bank (-Rs 37) ended amongst the losers list. Likewise, the Commercial banking sector (-0.87 percent) plunged as the share prices of key banks like Nepal Bangladesh Bank (-Rs 13), Machhapuchhre Bank (-Rs 14), and NMB Bank (-Rs 9) depreciated.
Despite Gorkha Finance (+Rs 11) and Janaki Finance (+Rs 25) being amongst the top gainers, the Finance sector (-0.47 percent) failed to impress investors as the share prices of Standard Finance (-Rs 15) and Imperial Finance (-Rs 14) declined.
Meanwhile, the Hotel sub-sector (+2.37 percent) posted the highest gain amongst the sub-indices primarily due to rise in share price of Soaltee Hotel Limited (+Rs 11).
The Insurance Sector (+1.09 percent) booked marginal return as Shikhar Insurance Company (+Rs 30) topped the gainers´ list. The ´Others´ Sub Sector (+1.08 percent) appreciated as share value of Nepal Telecom (+Rs 5) went up.
Amongst news and highlights, Nepal Bangladesh Bank and Nepal Sri Lanka Merchant Bank are in the process to merge and Nepal Sri Lanka Merchant Bank is holding a special general meeting on August 18 for the purpose.
On a positive note, World Bank is to provide technical and financial assistance to Securities Exchange Board of Nepal (SEBON) to modernize the capital market.
SEBON is preparing to formulate a five-year master plan which will focus on areas such as development of other supplementary institutions and services related to the capital market such as Credit Rating Agency, Central Depositary System (CDS) and attracting foreign investments.
On the IPO front, Kankai Bikas Bank is inviting application for initial public offering from August 5.
Forecast
Technical analysis indicators signal a continuation of the bearish trend for the coming week with no sign of reversal; the market will continue to hover in the lower end. However, if the market breaks out from its current support level a major downtrend can be expected.
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