Daily market commentary

Broad advance pushes Nepse higher

Published On: October 24, 2019 09:56 AM NPT By: Republica  | @RepublicaNepal

Kathmandu: The Nepal Stock Exchange (Nepse) index climbed over 5 points initially on Wednesday. The index quickly gave up its gains to trade roughly flat around mid-session. However, the exchange witnessed a broad advance in the closing hours leading the index 7.79 points higher. Nepse ended the day at 1,142.60 points.

After seeing weakness earlier in the week, the bourse has made some recovery forming two straight green candles, albeit with moderate gains. Buyers remained slightly dominant with selling pressure subsiding significantly following persistent downtrend since June. However, market activity remained subdued. The market saw a sub-par turnover of Rs 164 million.

All sectors closed the day in green following the index. Hydropower stocks were among the best performers of the day. The group's sub-index jumped 1.73%. Hotels and Mutual Fund sub-indices followed suit with gains of 1.21% and 1.09%. Life Insurance sub-index added 0.96%, while 'Others' sector climbed 0.74% higher. Heavyweight banking sector also closed higher gaining 0.63%. Similarly, all other sectors edged higher.

In terms of turnover, shares of Prabhu Bank Ltd posted the highest turnover of over Rs 27 million. NIC Asia Bank Ltd also witnessed a turnover of over Rs 14 million. NMB Microfinance Bittiya Sanstha Ltd and Standard Chartered Bank Ltd, correspondingly, posted total transactions of Rs 6 million and Rs 5 million. Nepal Life Insurance Company Ltd, Rasuwagadhi Hydropower Company Ltd and Upper Tamakoshi Hydropower Ltd were among actives with turnovers of over Rs 4 million each.

Neco Insurance Co Ltd led the day's advance rallying almost 6%. Himalayan Power Partner Ltd, Central Finance Co Ltd and Synergy Power Development Ltd also closely followed with gains of over 5% each. Further, Goodwill Finance Co Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd rose over 4% apiece.

Conversely, Dibyashwori Hydropower Ltd suffered the most giving up more than 5 points in the session. Secondly, Support Microfinance Bittiya Sanstha Ltd tanked almost 3%. Taragaon Regency Hotel Ltd, NLG Insurance Company Ltd and Gurans Laghubitta Bittiya Sanstha Ltd's shares also came under some pressure posting declines of over 2% each. Bottlers Nepal (Terai) Ltd also inched 2% lower. On Tuesday, the beverage manufacturer announced 40% cash dividend to its shareholders for the year 2018/19.

On the corporate news, Mero Microfinance Bittiya Sanstha Ltd called for its annual general meeting (AGM) on November 15. Endorsement of 30% bonus shares and 1.58% cash dividend is its key agenda among others.

As per the ARKS technical analysis, the market formed a bullish candlestick for a second straight day suggesting buyers taking over. Technical indicators also show a minor shift in momentum in favor of bulls. Nonetheless, the index has hit its 20 day Exponential Moving Average (EMA) which has acted as a resistance in the past month. Hence, the breach of the EMA line with notable volume can help the index substantiate the reversal. Another resistance lies at 1,150 points, while on the downside a support at 1,120 points has firmly held ground.

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

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