Daily Commentary

Nepse recoup morning losses to finish Sunday’s session in green

Published On: August 31, 2020 07:40 AM NPT

Benchmark index goes up 5 points

KATHMANDU, Aug 30: Stocks opened in red on Sunday with the benchmark Nepal Stock Exchange (Nepse) index shedding around 14 points in the morning. Thereafter, technical error in the trading system kept investors making any further transactions in the exchange for most of the afternoon. Finally, trading hours were extended for the day with Nepse adding 2 hours of trading from 3.15 pm. In the final two hours, buyers prevailed, helping Nepse erase its earlier losses to close with a gain of 4.64 points at 1,462.67.

While Thursday’s dip stoked fear among investors causing the index to sink sharply in the morning, the bourse continued to see notable buying pressure in the afternoon. Hence, the day’s dips were bought by investors, keeping the strength in the bourse intact. Despite the technical problem in the exchange, total turnover stood above par at Rs 1.6 billion.

On the sectors front, ‘Others’ sector continued its rally backed by a surge in share of Nepal Reinsurance Company Ltd. Trading and Non-Life Insurance sub-indices were the other major movers with advances of 2.1 percent and 1.31 percent. Hydropower and Manufacturing & Processing sectors followed suit as the respective sub-indices closed around 1 percent higher. All other sectors ended in green, while only Banking, Development Bank and Mutual Fund sub-groups inched lower.

Shares of Nepal Reinsurance Company Ltd were traded the most accounting for over 20 percent of the day’s total volumes. Over Rs 343 million worth of the shares changed hands. Newly listed NRN Infrastructure and Development Ltd also saw a notable turnover of Rs 118 million. Neco Insurance Company Ltd and Shivam Cements Ltd were also actively traded with turnovers of Rs 84 million and Rs 79 million. Surya Life Insurance Company Ltd, Nepal Life Insurance Company Ltd and Premier Insurance Company Ltd were the other actively traded shares.

NRN Infrastructure and Development Ltd also led the list of advances. Its share price rallied 10 percent to Rs 405 per share. Nepal Reinsurance Company Ltd and Siddhartha Insurance Ltd also saw major strength and shot up by over 8 percent each. Merged entity Unnati Sahakarya Laghubitta Bittiya Sanstha Ltd also rose 7.98 percent on its first day of trading. Himal Power Partner Ltd and Arun Kabeli Power Ltd rose over 7 percent apiece.

On the loser front, Taragaon Regency Hotels Ltd fell 5.16 percent, followed by units of Laxmi Equity Fund which sank 3.66 percent. The fund manager for Laxmi Equity Fund, Laxmi Capital Market Ltd announced 4.25 percent cash dividend for the unit holders for the fiscal year 2019/20. Multipurpose Finance Ltd and Union Hydropower Ltd’s shares also struggled, registering declines of over 3 percent each. Other major losing scrips include Best Finance Company Ltd, Ganapati Microfinance Bittiya Sanstha Ltd and Sunrise Bank Ltd.

On the technical front, the Nepse index formed a small hammer candlestick on the daily timeframe reflecting last hour strength seen in the day. Further, the market is still trading around the resistance zone at 1,370-1,480 points where a volume-backed breakout can see the market make further strides upwards. On the other hand failure to break the resistance might see the index consolidate around the current zone or even test support at 1,430 points mark.

This column is produced by ARKS Capital Advisors Ltd

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)



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