daily market commentary

Nepse posts solid gains, rises for fifth straight day

Published On: September 6, 2018 08:27 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 6: The sole equity market traded flat for the first hour of the trading session on Wednesday. However, a mid-day surge helped the Nepal Stock Exchange (Index) add more than 33 points to reach an intraday high of 1,243.61 points in the afternoon. The index fell slightly towards the session's end but still managed to close fairly higher with a gain of 23.89 points or 1.97 percent at 1,234.13 points.

Market breadth continued to favor the bulls as 145 stocks ended in the green while only 13 stocks closed lower. The stock market witnessed one of the most active sessions following the broad rally. Consequently, the bourse recorded a five-month high turnover of Rs 712 million. Investors seemed enthused to take long positions in the secondary market as the stock price has come to some of its lowest levels following two years of the sustained downtrend. Further, upbeat sentiment prevailed as investors are expecting a trend reversal at the current juncture. 

Most of the sub-indices moved in tandem with the broader market. Only Manufacturing & Processing and Trading sub-indices fell 1.63 percent and 1.35 percent, respectively. The biggest gain came from Hydropower stocks as its sub-index climbed 2.88 percent on the day. Sub-Index of Microfinance added 2.83 percent while that of Non-Life Insurance jumped 2.76 percent. Further, market bellwether bank also posted a significant move to the upside with its sub-index closing 2.16 percent higher. 

Shares of Kabeli Bikas Bank Ltd, following the announcement of bonus shares, has continued its surge for a third straight day. Its price surged 9.75 percent. Shares of Himal Power Partner Ltd closely followed suit with a gain of 9.72 percent. NMB Microfinance Bittiya Sanstha Ltd and Kumari Bank Ltd also advanced over 8 percent each. Meanwhile, scrips of Rairang Hydropower Development Company Ltd, United Insurance Company Ltd and Kalika Microcredit Development Bank Ltd shot up over 7 percent each. 

Stocks of Uniliver Nepal Ltd bucked the trend and dropped almost 4 percent. Guheshowori Merchant Bank & Finance Co. Ltd also tumbled over 3 percent. Similarly, Bishal Bazar Company Ltd, Global IME Sammunat Scheme-1, Gurkhas Finance Ltd and Nabil Equity Fund were the other top losing securities of the day. 

On the corporate front, Kalika Power Company Ltd will be floating 1.2 million Initial Public Offering (IPO) shares to the general public from September 13. The company's paid-up capital will reach Rs. 600 million after the capitalization. 

Arks technical analysis indicates the index closing above its immediate resistance of 1,224 points following five consecutive days of advances. Further, Moving Average Convergence/ Divergence (MACD) has breached the neutral line to end in the positive territory for the first time in three months. This suggests that the market is shifting towards an uptrend for the short run. Hence, the bullish momentum can be expected to persist if the index manages to hold above 1,224 points maintaining the recent market activity. 

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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