Daily Commentary: Nepse benchmark index jumps 29.68 points

Published On: November 24, 2020 08:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 24: The Nepal Stock Exchange (Nepse) index opened slightly higher and traded around 10 points higher in the morning. Further, stocks saw considerable strength after mid-day. A steady followed where the benchmark rose more than 30 points in the late afternoon. After a slight retracement towards the close, the index closed with a gain of 29.68 points at 1,810.11.

After consolidating around 1,780 point’s mark in the previous two sessions, investors showed enthusiasm to take buying positions, as the equity market portrayed no sign of substantial correction. Total turnover, subsequently, increased against the day earlier to Rs. 5.44 million.

Trading and Manufacturing/ Processing sectors led the day’s charge. The sub-indices shot up by 8.23% and 5.86%. ‘Others’ and Non-Life Insurance sector also saw notable buying pressure with both sectors closing around 4% higher. Life Insurance sector jumped 2.33%. All other sectors climbed firmly higher, barring Hotels segment which closed 1.65% lower.

Shares of NIC Asia Bank Ltd were traded the most ahead of its book closure for Annual General Meeting (AGM). The bank is due to approve 19% bonus shares and 1% cash dividend in the meeting. Over Rs. 373 million worth of the shares changed hands. Nepal Telecom Ltd and Nepal Reinsurance Company Ltd’s shares were also actively traded with turnovers of Rs. 285 million and Rs. 258 million. Himalayan Distillery Ltd, Neco Insurance Ltd and National Life Insurance Company Ltd were the other actively traded shares.

7 companies hit the upper circuit on the day. Bottlers Nepal Terai Ltd, Himalayan Distillery Ltd, Bishal Bazar Company Ltd, Ankhukhola Jalvidhyut Company Ltd, Multipurpose Finance Ltd, Ajod Insurance Ltd and Ngadi Group Power Ltd surged 10%. Neco Insurance Ltd, National Microfinance Bittiya Sanstha Ltd and Pokhara Finance Ltd also saw major strength.

On the other hand, Soaltee Hotel Ltd suffered the most. Its share price slumped 3.20%. Saptakoshi Development Bank Ltd also came under pressure with a loss of 3.07%. Janaki Finance Ltd and Unilever Nepal Ltd fell over 2% each. Api Power Company Ltd, Ganapati Microfinance Bittiya Sanstha Ltd and Everest Bank Ltd Convertible Preference Share also sank more than 1% each.

On the technical front, the market formed a bullish candlestick as the index closed above 1,800 points. Hence, bulls have remained in control in the present context. Momentum indicators also suggest that the uptrend is likely to stretch further. However, with the index still trading close to 1,800 psychological mark, investors must take some caution in the current range. If the market holds its ground above 1,800, with notable volume, further buying positions can be taken. Else a dip below 1,800 level can see the index witness some correction.

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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