Market springs back to life

With the indefinite strike coming to an abrupt end, the stock market finally recommenced trading this week.



The Nepal Stock Exchange (Nepse) index (+9.18 percent) ended its continuous losing streak for several weeks by observing an unprecedented reversal. The benchmark index picked up 44.79 points over the week to close at 457.81 points, the highest point on the index since April 4, 2010. [break]



Amongst the sub-indices, Commercial Banking sector (+13.72 percent) led the way as Himalayan Bank (+Rs 210) and Nepal SBI Bank (+Rs 214) which listed 2:1 right shares this week, posted the highest gain. Standard Chartered Bank (+Rs 270) accounted for 18.16 percent of the weekly volume, registering the highest turnover (Rs 23, 528,118).



The Development Banking sub-index (+6.33 percent) provided further boost to the market as the share prices of Vibor Bikas Bank (+Rs 66) and Sanima Vikas Bank (+Rs 73) appreciated.



Despite Lumbini Finance (-Rs 90) posting the biggest loss of the week, the Finance sector (+2.96 percent) ended the week in the green zone as Lord Buddha Finance (+Rs 40) and Capital Merchant and Finance (Rs 39) booked big gains.



Likewise, appreciation in the share prices of Chilime Hydropower (+Rs 28) and National Hydropower (+Rs 5) enhanced the Hydro Power sub-index (+1.66 percent).



Similarly, the ´Others´ sub-index (+6.51 percent) also posted gains as share price of Nepal Telecom Company (+Rs 29) moved up. The Insurance sector (-0.09 percent) was the only sector to end in the red zone as Siddhartha Insurance (-Rs 2) and Everest Insurance (-Rs 5) shed values.



Amongst other highlights, the Ministry of Finance gave go ahead to Nepse to appoint 27 new stock brokers.



Amongst declarations, Alpic Everest Finance proposed 1:1 right shares and 20 percent bonus shares; Kuber Merchant Finance announced 1:1 right shares; and Union Finance will propose 10 percent cash dividend.



Purwanchal Grameen Bikas Bank is closing its book on 23 May, 2010 for 20 percent cash dividend and Capital Merchant Banking and Finance is selling undersubscribed shares on auction till 24 May, 2010. On the IPO front, application for Alpine Development Bank starts on May 23.



Forecast: Despite the rapid gain seen in the market, an explicit uptrend cannot be identified as yet per technical analysis. Hence, the recovery is short-term. If the market volume continues to increase steadily along with the further rise in the prices of stocks next week, that will signal an uptrend.

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