Daily Market Commentary

Broad rally helps Nepse snap losing streak

Published On: January 8, 2019 09:36 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 8: Stocks traded on a positive note on Monday with the Nepal Stock Exchange (Nepse) index witnessing a steady advance in the first half of the trading session. Though the benchmark index, which crossed 1,180 points in the afternoon, pulled back slightly, it maintained a positive bias to close the day at 1,177.46 points – up 6.67 points against the preceding day.

The persistent selling pressure eased off on Monday following seven straight days of losses where the benchmark index lost a total of more than 45 points. The modest gain seen on the day can be taken as a slight retracement, while the market is yet to show signs of a significant turnaround. Market participation, subsequently, remained subdued as the bourse logged total turnover of over Rs 302 million.

Majority of the sectors ended the day in green. Considerable strength was visible among Insurance scrips. Sub-indices of Life Insurance and Non-life Insurance stocks rose by over 1.54 percent and 1.48 percent, respectively. Similarly, Hotels sub-index closed 1.03 percent higher followed by Microfinance sub-index which advanced 0.84 percent. Further, sub-indices of Development Bank and Banking segments climbed 0.53 percent and 0.46 percent, respectively. On the flipside, sub-indices of Manufacturing & Processing and 'Others' segments inched lower.

Shares of Nepal Bank Ltd continued to trade actively in the exchange. More than Rs 85 million worth of shares of the commercial bank changed hands in the session.  Similarly, shares of Nepal Credit & Commercial Bank Ltd registered total turnover of over Rs 16 million. Meanwhile, shares of Citizens Investment Trust and Nepal Life Insurance Company Ltd posted turnovers of Rs 15 million each. Prabhu Bank Ltd, Premier Insurance Company Ltd and Prabhu Insurance Ltd were among other top traded securities of the day.

Hathway Finance Company Ltd and Synergy Power Development Company Ltd led the list of advances, posting gains of over 6 percent each. Meanwhile, Civil Laghubitta Bittiya Sanstha Ltd, Saptakoshi Development Bank Ltd and Gurkhas Finance Ltd saw their respective share prices climb by over 4 percent each. Share prices of Support Microfinance Development Bank Ltd and Purnima Bikas Bank Ltd also advanced.

On the other hand, shares of Kisan Microfinance Bittiya Sanstha Ltd struggled and shed 3.72 percent. Mero Microfinance Bittiya Sanstha Ltd also posted a decline of 3.36 percent. Similarly, Himalayan Bank Ltd's share price fell by 3 percent. Other losing securities include Janautthan Samudayic Laghubitta Bikas Bank Ltd, Sindhu Bikash Bank Ltd and Pokhara Finance Ltd which closed over 2 percent lower each.

Nepse set opening trading range for shares of Joshi Hydropower Development Company Ltd between Rs 93.67 and Rs 281.01 per unit. The hydropower company, which issued 1.69 million shares on its Initial Public Offering (IPO), operates a 3-megawatt hydropower project in Ilam district. Meanwhile, the Annual General Meeting (AGM) of Kailash Bikas Bank Ltd held on Sunday approved 17 percent cash dividend to the company's shareholders.

As per the ARKS technical analysis, the index formed a small bullish candlestick erasing partial losses from the previous trading day. The market corrected slightly after sustained losses witnessed in the recent sessions. Further, technical indicators suggest a neutral momentum in the market with the index lacking significant conviction. Nonetheless, a surge above 1,200-point mark might indicate further upward movement for the short-term.

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