Price volatility continued to rock bullion market, however, by Friday gold became cheaper as compared to prices recorded on Sunday.[break]
Currency: Rupee bounces back after sharp fall
Nepali rupee strengthened by 51 paisa against a US dollar over the week, after tumbling sharply over the past two weeks. This made imports cost go down, but also lowered income of exporters and remittances receivers. On Friday, a dollar was valued at Rs 78.60.
Nepal Rastra Bank (NRB) -- country´s monetary authority -- had set the exchange rate of dollar at Rs 79.11 when the market opened this week on Sunday. As investors in India continued to pull out their money to invest in safer assets, rupee shed 29 paisa overnight on Monday and further fell down by 18 paisa on Tuesday. However, the trend reversed fast, with rupee enjoying a rebound of 70 paisa on Wednesday. Rupee further gained 2 paisa compared to previous day on Thursday and strengthened further by 26 paisa when the market closed on Friday.
Similarly, rupee gained 12 paisa against a euro, but shed 74 paisa against a pound sterling. A euro was exchanged at Rs 106.91, while a pound sterling was valued at Rs 122.76 on Friday.
Bullion: Gold sheds Rs 1,050 per tola
Although domestic bullion market continued to remain in jitters, reflecting mood of global investors, gold slid by Rs 900 per 10 grams (Rs 1,050 per tola) over the week. The yellow metal was traded at Rs 43,125 per 10 grams on Friday.
Bullion trading had opened this week with gold priced at Rs 44,025 per 10 grams on Sunday. But the yellow metal shed Rs 1,330 per 10 grams overnight on Monday, as international investors reacted strongly to US government´s $1.5 trillion relief package. But the confidence did not last long, as investors rushed for gold again on Tuesday, causing prices to shoot by Rs 780 per 10 grams. Although the price was not changed on Wednesday, it slid by Rs 865 per 10 grams on Thursday. Gold rallied by Rs 515 per 10 grams on Friday.
Prices of silver also recorded similar upheavals over the week. Contrary to net drop in prices of gold, price of silver went up by Rs 13 per 10 grams. Silver was traded at Rs 960 per 10 grams on Friday.
Stock: Nepse logs marginal gain
The market experienced a marginal increase of 1.17 percent gaining 3.85 points this week with the Nepal Stock Exchange (Nepse) index closing at 331.4 points on Thursday.
Though the market rallied on the opening day of the week, it failed to sustain the same momentum during the week. Moreover, the average daily market turnover increased by an impressive 91 percent as compared to the last week. Laxmi Bank and Nepal Investment Bank contributed to almost 43.20 percent of the total weekly market turnover.
The Commercial Banking sub-index (+1.08 percent) was the biggest gainer of the week, as share prices of KIST Commercial Bank (+Rs 21), Himalayan Bank (+Rs 60), Siddhartha Bank (+Rs 14) and Nepal SBI Bank (+Rs 25) advanced. The Insurance sub-index (+1.49 percent) followed suit, as share prices of Prime Life Insurance (+Rs 9) and Nepal Life Insurance (+Rs 20) went up. Similarly, the ´Others´ sub-index (+1.21 percent) bounced back from the last week´s loss, as the share price of Nepal Telecom (+Rs 11) appreciated. Likewise, the Hydropower sub-index (+0.37 percent) surged, as the share value of National Hydropower Company (+Rs 4) and Chilime Hydropower Company (+Rs 20) climbed up. The Finance sub-index (+0.018 percent) increased marginally, as Janaki Finance (+Rs 27) and Unique Finance (+Rs 11) ended amongst the top gainers of the week. Nonetheless, the Development Banking sub-index (-0.043 percent) slid, as share prices of City Development Bank (-Rs 7) and Resunga Bikash Bank (-Rs 9) tumbled.
Amongst news and highlights, Insurance Board -- the insurance sector regulator -- has barred both life and non-life insurance companies from distributing cash dividend to their shareholders unless they meet the new capital requirement. Under the new requirement, life insurance and non-life insurance companies need to have paid-up capital of Rs 500 million and Rs 250 million respectively. The board has directed the companies to increase their capital base by mid-July 2013.
As for company announcements, International Leasing and Finance Company has proposed to distribute 6 percent cash dividend. Jyoti Bikas Bank has proposed to distribute 8.5 percent cash dividend and Om Finance has proposed to give 10.53 percent cash dividend. Similarly, Maha Laxmi Finance has proposed to distribute 12 percent cash dividend and Swastik Merchant Finance has proposed to distribute 14 percent bonus shares. (All the above mentioned benefits are subject to approval from Nepal Rastra Bank and their respective AGMs).
Global Bank is holding its 5th AGM on October 18 (book closure: October 2); it will propose 6.67 percent bonus shares and 5.35 percent cash dividend. Similarly, KIST Bank is holding a special AGM on October 19 (book closure: October 9). It will seek approval for possible merger with other suitable BFIs or foreign strategic partner. Likewise, Shree Investment and Finance is holding its 17th AGM on November 6 (book closure: October 17). It is proposing 15.02 percent bonus shares and will seek approval for possible merger with other suitable BFIs. The 16th AGM Of Bank of Kathmandu has approved 16.75 percent cash dividend and 18 percent bonus shares.
Stock Forecast
Technical Analysis indicators signal continuation of the short term up-trend for the coming week, if accompanied by volume.
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