Daily Commentary: Nepse climbs higher amidst increased volume

Published On: September 10, 2020 07:37 AM NPT

KATHMANDU, Sept 10: Stocks in the local equity market extended gains for a second straight day. The Nepal Stock Exchange (Nepse) index rose in the beginning of Wednesday’s sessions but reverted towards the opening level at mid-day.

However, the equity market gained some traction in the latter 3 hours with the index trading in green throughout. Reaching as high as 1,512 points in the afternoon, the major average pulled back slightly towards the close to, finally, settle at 1,508.21. Consequently, Nepse finished the session 13.05 points higher.

While some correction ensued after the index climbed above 1,500 points mark in the previous week, the equity market found strong ground this week after reaching as low as 1,477 points on Tuesday. With the gain seen in the bourse, the equity market also saw increased market participation with turnover crossing Rs. 2.5 billion mark.

Most of the sectors ended the day in green, while only Banking and Development Bank sub-indices inched lower. Non-Life Insurance segment made a notable recovery as the respective sub-index shot up by 3.50%. Trading stocks also saw significant strength pushing the sub-index higher by 3.39%. Microfinance, Life Insurance and Hotels segments also registered gains of over 1% each. All other sectors saw moderate advances on the day.

Shares of Nepal Reinsurance Company Ltd, continued to lead the list of top turnover scrips. Over Rs. 223 million worth of the reinsurer’s shares changed hands. Citizen Investment Trust also saw heavy transactions as more than Rs. 186 million worth of the stock changed hands. Shivam Cements Ltd, Surya Life Insurance Company Ltd and Neco Insurance Ltd, meanwhile, posted turnovers of over Rs. 120 million each. Himalayan Distillery Ltd, Nepal Life Insurance Company Ltd and Shikhar Insurance Company Ltd were also actively traded.

Rastriya Beema Company Ltd, which has seen relatively subdued performance among non-life insurers, saw notable charm on Wednesday. Its share price rallied 10%. Similarly, Reliance Life Insurance Ltd also stretched its post-listing rally with another 10% gain. Arambha Chautari Laghubitta Bittiya Sanstha Ltd, meanwhile, shot up by 9.31%. Similarly, other microfinance stocks saw strength. Nerude Laghubitta Bittiya Sanstha Ltd rose 8.69%, Swarojgar Laghubitta Bittiya Sanstha Ltd climbed 7.82% and Civil Laghubitta Bittiya Sanstha Ltd jumped 6.96%.

In contrast, NRN Infrastructure and Development Ltd tumbled another 10% to Rs. 354 per share erasing most of its gains since its opening trading day. Kalika Power Company Ltd, Arun Kabeli Power Ltd and Universal Power Company Ltd were the other major losing scrips recording declines of 4.80%, 4.17% and 3.09%, respectively. Laxmi Equity Fund, Reliance Finance Ltd and Himal Dolakha Hydropower Company Ltd were among other major laggards with losses of over 2%.

In terms of ARKS technical analysis, the market formed a second bullish candlestick on the daily timeframe as stocks tried to recoup its early week losses. Besides, volumes have also increased slightly as bulls are trying to gain control. The market holding its footing above 1,470 points mark can be taken as an upbeat signal, which keeps the overall uptrend intact. Technical indicators also suggest buyers gaining momentum. Immediate resistance lies at around 1,550 point’s level.

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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