The surge in the index was led by the Commercial Banking and the Hydropower sectors. Moreover, the average weekly market turnover increased by 16.47 percent compared to last week. [break]The trading of promoter shares of NIDC Capital Markets contributed to almost 24 percent of the weekly turnover.
The Commercial banking sub-index (+3.89 percent) was the biggest gainer of the week as share prices of Agricultural Development Bank (+Rs 47), Nepal Bangladesh Bank (+Rs 14), Nabil Bank (+Rs 111) and Everest Bank (+Rs 74) end in green territory. The Hydropower sub-index (+3.28 percent) continued to lure investors as share prices of National Hydropower Company (+Rs 3) and Chilime Hydropower (+Rs 43) surged. The ´Other´ sub-index (+3.06 percent) followed suit helped by rise in share price of Nepal Telecom (+Rs 15). Similarly, the Insurance sub-index (+2.81 percent) ended in green territory as share values of Prime Life Insurance (+Rs 31), Guras Life Insurance (+Rs 9) and Asian Life Insurance (+Rs 9) increased.
Likewise, the Development banking sub-index (+2.12 percent) bounced back from its previous week losses as Chhimek Laghubitta Bikas Bank (+Rs 65) and Karnali Development Bank (+Rs 10) ended amongst the top gainers of the week.
Nonetheless, the Finance sub-index (-0.59 percent) stumbled this week, as share prices of Subha Laxmi Finance (-Rs 9) and Shree Investment Finance (-Rs 18) plummeted.
Amongst news and highlights, Nepal Rastra Bank (NRB) has issued Letter of Intent (LOI) for mergers between Nepal Industrial and Commercial Bank and Bank of Asia Nepal, and Shine Development bank and Resunga Development Bank. Also, NRB has barred the directors of Banks and Financial Institutions (BFIs) from taking personal loans.
Central Depositary System and Clearing Limited (CDSCL) have started dematerialization process. As of now only Ace Development Bank and Agricultural Development Bank have signed agreement with CDSCL. Securities Board of Nepal (Sebon) has approved the guidelines for Mutual Fund. Siddhartha Mutual Fund is preparing to launch schemes in the near future.
As of company announcements, National Life Insurance Co has proposed to distribute 30 percent bonus shares to its shareholders from the profit earned in fiscal year 2011/12. Navadurga Finance has extended its 253,264 units of right shares issue to the shareholders till July 24. Likewise, Premier Insurance Co is holding its 18th AGM on August 6 (book closure: July 19). Also, Butwal Finance, CMB Finance and Alpic Everest Finance are holding their respective AGMs on August 13.
Forecast
The market is approaching an over buy position. Technical Analysis indicators signal continuation of the current trend if accompanied by strong volume only.
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