Starting of year 2020 is truly a blessing for investors! Find out how?

The first month of 2020 has seen World War threat, Indonesian flood, Australian fire, multiple earthquakes, volcanic eruptions and Virus outbreak. However, the capital market of Nepal is showing trends against the wave of pessimistic global outlook.

The NEPSE index had opened at 1,166.03 points on January 01, 2076 and today at 3 PM it closed at 1,325.38 points. In a period of just one month or to be exact in 22 trading days, the index has gone up by 159.35 points or 13.67% in total.

During the first month of 2020, a total of 25 companies have reported more than 50% increase in price. These companies are shown through the graph below:

Looking further into these top companies, we can see that 18 of them are microfinance companies (Class D financial institutions), 4 are life insurance companies, 2 are non-life insurance companies and 1 is finance company. This composition shows that this rise in market is being led by the microfinance institutions.

Now lets dive into the major market statistics to see how the market has performed in this month alone in comparison to the entire year of 2019.

*For 2019 data from January 15 is being taken due to non-availability of data. However, since average figures are being taken, the impact is negligible.

As seen in the table above, the total turnover for 2019 stood at Rs 103.93 arba and for January 2020 stood at Rs 26.89 arba. Thus, in January alone the turnover is around 25.88% of the total turnover of last year i.e 12 months.

In 2019 there were 234 tradable days and in January 2020 there were 22 tradable days till yesterday. Based on that, the average turnover per day in January 2020 stood at Rs 1.22 arba against 44.41 crore of last year. The same can be seen in case of shares traded and total number of transactions per day.

Similarly, the total market capitalization increased only by Rs 35.756 billion during 12 months of 2019 but in one month of 2020, it went up by Rs 199.743 billion. This change is tremendous, and as discussed earlier this bull is being led by the Microfinance Sector.