Analysis and Explanation of the Historical Comparison Data of NEPSE

Overview

The provided data compares the closing stock prices of various companies listed on the Nepal Stock Exchange (NEPSE) between two specific dates: August 19, 2021, and June 29, 2020. It also reveals the absolute difference and percentage change in the closing prices in this period.

Key Findings

Market Trend: The NEPSE index has risen considerably from a base value of 1188.7 on June 29, 2020, to 3180.86 on August 19, 2021, an increase of 1992.16 points or approximately 167.59%. Such a significant rise indicates the presence of a robust bull market at this time.

Top Performers:

RHPC (Ridi Hydropower Development Company Limited): Rising from NPR 77 to NPR 1037, a rise of 960 points or 1246.75%. This substantial increase points more strongly to growth and investment in the hydropower sector.

GUFL (Gurkhas Finance Limited): Raised from NPR 106 to NPR 1282, an increase of 1176 or 1109. 43%.

NGPL (Ngadi Group Power Limited): Increased by 1040 points or 990% from NPR 105 to NPR 1145. 48%.

Sectoral Performance:

Hydropower Sector: These include RHPC, UNHPL, NHPC, and AHPC; all of which register tremendous growth and may indicate sound government policies or a boost in investment in renewable energy sources.

Finance Sector: GUFL and ICFC firms have shown a hike in price which means that the finance industry has improved and expanding its market share.

Consistent Growth Across Companies:

Many firms have recorded high growth with percentages above 100% which shows that the market is expanding.

Interpretation

Bull Market Confirmation: The general rise in the NEPSE index and impressive value addition in several firms support the notion that the market went through a strong bull phase. People had high expectations, and it is possible that there was a lot of money invested in the market.

Sectoral Confidence:

Hydropower and Finance: This could have been as a result of increased investments in the hydropower and finance industries, more policies supporting the two industries, or growth in the two industries. This may point to a conscious move towards these sectors by investors since they have growth prospects and stability.

Economic Recovery Post-Pandemic:
Mid 2020 to mid 2021 may be considered as a phase of recovery after the COVID-19 pandemic. The sharp appreciation of the stock prices may be attributed to general economic improvement, enhanced business activities, and regained investors’ confidence.

Investment Opportunities:
The results have implications for future investment in industries that demonstrate positive returns. For future investment, investors should look at sectors such as hydropower and finance because of their better past performance and future prospects.

Risks and Considerations

Market Volatility: It is important to remember that although the figures are rising incrementally, there are always fluctuations in the market and possibilities for declines. These kinds of gains could prove to be unsustainable in the long run if there is not strong fundamental base.

Sector-Specific Risks:

Hydropower: The performance of the business largely depends on government policies, the surroundings, and infrastructure advancement.

Finance: Policies and competition from the market can affect future growth.

Broader Economic Factors: External factors such as inflation rates, interest rates, and other global economic variables have an impact on the NEPSE index and specific shares.

Conclusion

The historical analysis of the closing stock prices shows that there was a positive growth phase and confidence of investors in the NEPSE market. Hydropower and the finance sector have been seen to benefit the most as they tend to have sector-specific growth and opportunities. Nevertheless, one must not forget about the fluctuations in the stock market and other economic factors that can have an impact on the future course of the market.

Disclaimer: Any kind of information that is provided in the article should not be used as sole advice or recommendation by investors in order to design their investment portfolio. So, before taking steps for any kind of information, the investors are required to base their judgment on their financial analysis, the appropriateness of the information, and seek independent financial advice. The information about the company has been taken from authorized sources like the website of the company. So, any changes not updated in these may differ in the analysis.