Though the market started the week on a negative note losing 2.59 points, it experienced some support at 395 levels, and remained positive for the rest of the week. The investors are adopting a cautious stance ahead of the announcements of benefits by the listed companies. [break]As the market was open for trading for only four days, the average daily market turnover has decreased by 31.20 percent.
The sub-indices representing the Banks and Financial Institutions (BFIs) ended up in a negative note. The Commercial banking sub-index (-1.75 percent) tumbled as share prices of Sunrise Bank (-Rs 7), Siddhartha Bank (-Rs 14), Grand Bank (-Rs 8) and NMB Bank (-Rs 7) went down. The Finance sub-index (-0.37 percent) followed suit as NIDC Capital Markets (-Rs 20) and Hama Merchant and Finance (-Rs 14) ended amongst the top losers of the week. Similarly, the Development banking sub-index (-0.03 percent) slipped marginally as share prices of Diyalo Bikas Bank (-Rs 7) and Manakamana Development Bank (-Rs 5) decreased.
Nonetheless, the Hydropower sub-index (+3.85 percent) bounced back from its previous week´s losses helped by rise in share prices of Butwal Power Company (+Rs 63), Arun Valley Hydropower (+Rs 11) and Chilime Hydropower (+Rs 12). The ´Others´ sub-index (+2.06 percent) also gained value as share price of Nepal Telecom (+Rs 11) increased. Similarly, the Insurance sub-index (+0.25 percent) continued with its upward momentum as Alliance Insurance (+Rs 7) and Shikhar Insurance Company (+Rs 10) ended the week in green territory.
Amongst news and highlights, Nepal Rastra Bank (NRB) has directed commercial banks not to distribute cash dividend to their shareholders if their Capital Adequacy Ratio is below 11 percent. Likewise, as per the central bank´s latest circular, commercial banks can be allowed to operate as a Depositary Participant (DP) of the Central Depositary System and Clearing Limited (CDSC).
As of company announcements, Biratlaxmi Bikas Bank is selling its undersubscribed promoters´ right shares in auction. The deadline for application is August 28. Narayani National Finance and Pathibhara Bikas Bank have proposed to distribute 18.94 percent and 13 percent cash dividend to their respective shareholders. All the above benefits are subject to approval from NRB and their respective AGMs.
Likewise, the 24th AGM of National Life Insurance has approved the proposal to distribute 30 percent bonus shares.
On the IPO side, the application deadline for Khandbari Development Bank´s initial public offering has been extended up to September 9. Bright Development Bank is issuing 420,000 units of ordinary shares from August 30.
Forecast:
Technical analysis indicators signal continuation of the current trend.
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