Daily Market Commentary

Broad rally helps Nepse snap losing streak

Published On: February 20, 2019 05:30 AM NPT By: Republica

KATHMANDU, Feb 20: Stocks opened the day's trading on a strong note. The first trading hour saw the Nepal Stock Exchange (Nepse) index add more than 13 points. Despite the market losing slight momentum in the afternoon, a surge toward the close pushed the benchmark index 22.44 points higher. Nepse closed the day at 1,124.96 points on Tuesday.

The index snapped its losing streak after Nepal Rastra Bank (NRB) published a mid-year monetary policy review. NRB's inclination to address the recent credit rate conundrum mainly fueled investor optimism on the day. However, the market lacked significant activity with a total turnover of only Rs 214 million.

All major sub-indices ended the day in green with maximum gains coming from Life Insurance scrips. The group's sub-index jumped up by 4.57 percent. Similarly, Microfinance and Non-Life Insurance sub-indices advanced by almost 3 percent. Hydropower and 'Others' sub-indices also witnessed gains of over 2 percent each. Strength was also visible among heavyweight banking stocks. Banking sub-index closed over 1.55 percent higher, while Hotels sub-index climbed up by 1.35 percent.

Upper Tamakoshi Hydropower Ltd led the list of active stocks. More than Rs 12 million worth of the energy sector company's shares changed hands on the day. Next on the list was Citizen Investment Trust with over Rs 9 million worth of shares traded. Similarly, Nepal Bank Ltd and Nabil Bank Ltd Promoter Share registered turnover of over Rs 8 million each. Shares of Chhimek Laghubitta Bittiya Sanstha Ltd and Nabil Bank Ltd were also traded actively in the market.

Microfinance stocks dominated the list of top advances. Share price of Chautari Laghubitta Bittiya Sanstha Ltd and Kalika Laghubitta Bittiya Sanstha Ltd rallied by almost 10 percent. Similarly, Naya Nepal Laghubitta Bittiya Sanstha saw its share price advance by 7.58 percent. Insurance scrips, including Surya Life Insurance Company Ltd and Gurans Life Insurance Company Ltd, added over 7 percent on their share prices.

Share price of World Merchant Banking & Finance Ltd, on the other hand, tanked for second straight day logging a drop of 10 percent. Khanikhola Hydropower Company Ltd and Ankhu Khola Jalavidhyut Company Ltd followed suit with losses of 3.75 percent and 2.47 percent, respectively. Tinau Development Bank Ltd, NMB Sulav Investment Fund – 1, and National Hydropower Company Ltd were among other decliners of the day.

On news front, Special General Meeting of Womi Microfinance Bittiya Sanstha Ltd held on Monday approved a proposal to issue 100 percent right shares to its shareholders. Besides, Global IME Bank Ltd is set to issue '10.25% Global IME Bank Debenture 2080/81' from February 27. The issue is worth Rs 1.5 billion.

As per the ARKS technical analysis, the market formed a bullish candlestick on the daily timeframe reflecting the day's buying pressure. With the gain, the index has erased losses accrued over the past three days. Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both showed a sign of recovery. Hence, some upward movement can be expected given the index maintains above the 1,120-point zone.

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