Dividends fuel transactions, Nepse drops below 700-point mark

The declaration of dividends -- cash and shares -- has made the shares of Nabil Bank, Standard Chartered Bank Nepal, Nepal Investment Bank, Citizens Bank International and Bank of Kathmandu hotcakes in the secondary market this week.

This week too, Standard Chartered Bank Nepal topped the chart in terms of transaction amount with Rs 65.45 million, though it declared its dividends two weeks ago. Nabil bank followed with Rs 54.55 million whereas Citizens' Bank International (with Rs 41.80 million), Bank of Kathmandu (with Rs 37.81 million) and Nepal Investment Bank (with Rs 35.62 milllion) topped the chart in terms of transaction.

However, these banks' transactions could neither rescue Nepal Stock Exchange (Nepse) nor the commercial banks' sub-group. Nepse plunged by 28.28 points to 681.54 points from Sunday morning's opening of 709.82 points. Similarly, the commercial banks sub-group -- one of the key market propellers -- lost the whopping 45.86 points to 708.75 points from the Sunday morning's opening of 754.61 points.

Except, hotels sub-group, all the other sub-groups performed poorly this week. Development banks sub-group plunged by 12.92 points to 707.84 points from the opening 720.76 points. Finance companies sub-group dropped by 10.87 points to 662.79 points from the Sunday morning's opening of 673.66 points, while the others sub-group also lost 4.70 points to 659.11 points from 663.81 points. Hydropower and insurance sub-groups lost only 2.83 points and 1.55 points to drop to 874.79 points and 640.26 points, respectively.

However, 122-unit shares of Soaltee Hotels -- that were traded on Thursday -- pushed the hotels sub-group's index up by 2.90 points to 366.85 points from Sunday morning's 363.95 points. The rarely traded manufacturing and trading sub-groups did not observe any trading this week too.

In terms of number of share units traded, National Hydropower Company topped the chart with 76,000-unit shares changing hands while in terms of number of transactions Citizens' Bank International topped the chart with 1068 transactions.

The transaction amount also decreased by 19.46 points to Rs 512.72 million this week against last week's increase of 63.50 per cent.

However, in the total transactions group-A companies' contribution matched almost last week. This week, the group contributed 62.89 per cent, wheras it was 67.13 per cent last week. The 78-scrip sensitive index -- a barometer of Group-A companies -- lost 10.16 points to 180.21 points, though float index -- calculated on the basis of real transactions -- skidded down only by 2.63 points to 65.95 points from the Sunday morning's opening of 68.58 points.

The market propellers

KATHMANDU: Out of the 26 commercial banks these banks declared the cash dividends and bonus shares.

Banks-- cash dividend -- bonus shares

Standard Chartered Bank Nepal -- 50pc -- 50pc

Nabil Bank -- 35pc -- 50pc

Nepal Investment Bank -- 20pc -- 0

Citizens International Bank -- 10pc -- 0

Book on Techincal analysis of shares

KATHMANDU: Though the domestic share market doesnot follow the internationally-accepted practice -- neither fundamentals nor technical -- and directed by hearsay and noise creators, Rabindra Bhattarai, a share analyst and lecturer at Shanker Dev Campus, has brought a book on Technical analysis of Shares in the market; Share ko Prabidhik Bishleshan (Technical analysis of shares). The book tries to explain some of the technical system of analysis like double top formation, double bottom formation, head and shoulder formation, rounding top, rounding bottom, triangle, rectangle, support and resistance, A-D ration and volumn analysis. The investors could take more benefit, if they read the book, though it could not be guaranteed in the domestic market. Bhattarai rightly quotes in the book -- buyers buy in the expectation that the price will go higher and the sellers sell because they think the price will go down, its a huge psychological game that repeatsdaily at the floor. But the book might boost pyshological confidence of the investors with logical analysis.