Market bounces back

The market revived this week with the Nepse index (+1.12%) rising continuously for four consecutive trading days. The announcements of lucrative right and bonus shares along with cash dividend encouraged investors to re-enter the market. Despite the current nationwide protests, market is exhibiting signs of resurgence also because of the record low prices drawing investors´ attention. [break]



The Commercial Banking sub-index (+2.20%) made significant gains as major banks like Himalayan Bank (Rs 4) announced 31.56% bonus shares and 12% cash dividend and Bank of Kathmandu (+Rs 15) announced 40% bonus and 7.37% cash dividend lifting up the banking sector. In addition, the newly traded shares of Prime Commercial Bank (+Rs 620), Sunrise Bank (+Rs 455) that has proposed 60% right shares, and Vibor Bikas Bank (+Rs 380) provided a massive boost to the market.



Finance companies booked the top spots in both the gainers and losers charts. Nevertheless, the Finance sub-index (-0.96%) fell. With the losses in the majority of the development banks, the Development Banking sub-index (-1.57%) descended as well. Share prices of Lumbini General Insurance (-Rs 1) depreciated but overall Insurance sector (+0.06%) was able to improve. Among other news in the sector, insurance companies will use mortality rate to calculate the premiums beginning November 2009. The share price of Nepal Telecom increased (+Rs 5) pulling up the ´Others´ sub-index (+0.94%). The Hydro Power sector sub-index (-0.81%) continued its market downtrend through the depreciation of Chilime Hydropower´s (-Rs 5).



Several other developments took place in the market this week. Tanka Prasad Paneru has been named chairman of Nepal Stock Exchange. Likewise, the Nepal Rastra Bank has directed banks and financial institutions to reduce the limit of renewal of margin lending by 50%. On the declaration side, Nepal SBI Bank (+Rs 55) proposed 40% bonus shares and 2.11% cash dividend; Subhechha Bikas Bank (Rs 0) proposed 20% bonus share and 11.1% cash dividend; Triveni Bikas Bank (+Rs 14) and Sahayogi Bikas Bank (Rs 0) have proposed 30% and 25% bonus shares respectively.



Similarly, Lumbini Finance (+Rs 13) proposed 25% bonus shares and 1.23% cash dividend and Central Finance has proposed 15% bonus shares as well as 0.79% cash dividend. National Finance and Narayani Finance completed their merger Tuesday to become Narayani National Finance which is the first merger in Nepal´s banking and finance sector. Technical analysis tools indicate that the market will hit an uptrend which is reiterated by the rise seen in the market turnover (Rs 326,889,379).

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