The Nepse jumped to a four-year high of 566.99 points last week. The last time the Nepal Stock Exchange index reached that level was on Nov 22, 2009 when it closed at 562.11 points. The stock market gained 15.30 points after showing a bullish trend throughout the week.
The market had reached an all-time high of 1175.38 points on March 31, 2008 and plunged to an all-time low of 292.32 on June 6, 2011 shortly after the dissolution of the Constituent Assembly.
Stock analysts considered the growth as being sustainable after it crossed the resistance point of 556. Stock expert Rabindra Bhattarai predicted that the Nepse would take an upward trend once it crossed the resistance point. “The secondary market could rise smoothly to 590 points at the least,” he added.
Stock brokers have attributed the growth to a number of causes including favourable political changes, increasing liquidity with banks and expectations of a favourable financial statement from banks in their first quarter report which they have to publish after mid-October.
“As banks have to publish their first quarterly report immediately after Dashain, most investors rush to buy shares expecting a rise in prices at that time. This has helped the secondary market to rise notably last week,” said Anjan Raj Paudel of Thrive Brokerage House.
Paudel said that the secondary market could hover around 585 points after Dashain. “The political consensus for the planned election and excess liquidity with banks could help in this regard,” he added.
Bhattarai also considered the upcoming election as one of the major factors for the positive change in the Nepse. “As most investors have speculated that the stock market could rise after the election, they are buying a large number of shares at present.”
Meanwhile, almost all the groups listed on Nepse except Trading gained last week. Hotels, Insurance Companies, Hydropower, Commercial Banks, Others and Manufacturing groups witnessed double-digit gains over the period. Hotels led the gainers with 44.28 points. Nepal Bangladesh Bank topped the list in terms of transactions with a turnover of Rs 59.92 million. Transactions totalled Rs 569 million from the trading of 1,943,263 shares last week.
source: www.ekantipur.com
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