Rupee weakens, gold tumble continues

REPUBLICA

KATHMANDU, Jan 21: Nepali rupee weakened against US dollar this week, as greenback slipped against Indian currency with which the Nepali currency is pegged. This raised income for exporters and remittances receivers, but rendered imports expensive. Despite this, gold price plummeted in the domestic market, thanks to drop in gold prices in the international market.

Currency

Nepali rupee slipped 54 paisa against a US dollar over the week, as greenback slipped against Indian currency. A dollar was exchanged at Rs 73.20 on Friday.

Nepal Rastra Bank -- country´s monetary authority -- had set exchange rate of a US dollar at Rs 72.66 when the market opened this week on Sunday. Rupee sharply shed 24 paisa on Monday and again slipped by 35 paisa on Tuesday. On Wednesday, however, rupee bounced back recording an overnight gain of 20 paisa and further appreciated by 15 paisa on Thursday. On Friday, however, it weakened by 30 paisa against a dollar.

Likewise, rupee weakened against euro as well as pound sterling this week. It shed 93 paisa against a euro and dropped by a whopping Rs 1.56 against a pound sterling over the week. On Friday, a euro was exchanged at Rs 98.26, while a pound sterling was valued Rs 116.63.

Bullion

Gold became cheaper by Rs 295 per 10 grams in the domestic market over the week, as dollar strengthened against major rival currencies causing demand for gold -- the save haven for investors - to fall in the international market. On Friday, gold was traded at Rs 33,525 per 10 grams.

Trading had opened this week with they yellow metal priced at Rs 33,820 per 10 grams on Sunday. Even though gold became cheaper by Rs 40 per 10 grams on Tuesday, it rallied over the next two days, gaining Rs 85 per 10 grams on Wednesday and Rs 45 per 10 grams on Thursday. On Friday, however, gold price dipped sharply by Rs 385 per 10 grams.

The price of silver too dropped in the domestic market over the week and closed at Rs 703 per 10 grams on Friday.

Stock

The market continued to showcase its uptrend (+1.03 percent) for the second consecutive week, as Nepal Stock Exchange (Nepse) closed at 406.9 points. The uptrend can be primarily attributed to the speculations prior to the second quarter results and increment in share value of Nepal Telecom. However, total turnover decreased by 7.58 percent compared to last week.

The ´Others´ sub-index (+2.03 percent) posted the highest gain amongst all the sub-indices, as share price of Nepal Telecom (+ Rs 10) appreciated. The Hydropower sub-index (+1.94 percent) continued its upward rally for the second consecutive week, as share values of Chilime Hydropower (+Rs 45) and Arun Valley Hydropower (+Rs 3) rose. The Insurance sub-index (+1.51 percent) retrieved from its last week´s dip helped by gains in share prices of Nepal Life Insurance (+Rs 63), Shikhar Insurance (+Rs 14) and Asian Life Insurance (+Rs 4).

The Commercial Banking sub-index (+ 1.33 percent) made significant gains this week, as banks like Nepal SBI Bank (+Rs 50), Machhapuchhre Bank (+Rs 14) and Global Bank (+Rs 14) saw their share prices appreciated. The Finance sub-index (+0.06 percent) saw marginal gain, as both the top gainers and top losers for the week are from this sub-index. Suryadarshan Finance (+Rs 33) and Kuber Merchant Finance (+Rs 17) were the top gainers, while Butwal Finance (-Rs 84) was the top loser.

Nevertheless, the Development Banking sub-index (-1.70 percent) continued to shed value as share prices of Jyoti Bikash Bank (-Rs 95), Udhyam Bikash Bank (-Rs 51) and Infrastructure Development Bank (- Rs 16) plummeted. Likewise, the Hotels sub-index (- 0.78 percent) followed suit as share prices of Oriental Hotels (-Rs 8) and Soaltee Hotel (- Rs 1) descended.

Amongst news and highlights, Nepal Sri Lanka Merchant Banking & Finance is merging with Nepal Bangladesh Bank and is starting operation as a single entity from Jan 23. Securities Board of Nepal (SEBON) has formed a steering committee and six advisory groups under the coordination of its chairman to create policies for formulating a five-year master plan to strengthen the security market. The share trading of Gurkha Development Bank has been suspended by Nepse as it is under investigation.

On the declaration front, Life Insurance Co (Nepal) is holding its 9th AGM on Feb 7 February (Book Closure: Jan 24). It is proposing 5.26 percent cash dividend. The 18th AGM of Yeti Finance has approved 12 percent bonus shares. Similarly, the 18th AGM of Nepal Finance and saving has approved 27 percent bonus shares. Zenith Finance´s 3rd AGM has approved 20 percent bonus share and 6:5 rights share.

Similarly, Kathmandu Finance´s 16th AGM has approved 20 percent bonus share. Everest Finance´s 8th AGM has approved 20 percent bonus share and 10 percent cash dividend. Furthermore, Nepal Express Finance´s 5th AGM has approved 10 percent bonus share. Pokhara Finance´s 4th AGM has approved 10 percent cash dividend. Narayani National Finance´s 18th AGM has approved 10.5 percent cash dividend.

Forecast: Technical analysis tools indicate that the current short term uptrend will continue. However, this signal is not corroborated by the turnover.