Daily Commentary: Nepse ends week on a positive note

Published On: October 1, 2020 08:35 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 1: The local bourse opened Thursday’s trading on an upbeat note as the Nepal Stock Exchange (Nepse) index added more than 10 points in the first trading hour. Further, a mid-day surge pushed the benchmark another 10 points to climb above 1,570 point’s mark. The market witnessed some retracement in the afternoon but managed to end the day 20.61 points higher at 1,571.04.

After three consecutive sessions of modest declines, the index found some footing on the day, erasing all of its earlier sessions’ losses. Following signs of a reversal, investors also remained enthused to participate in the equity market. Turnover crossed Rs 2.8 billion on the last trading day of the week.

All sectors ended firmly higher except Hydropower and Mutual Fund segment. Hydropower sector corrected sharply after massive rally in the prior month. The group’s sub-index slumped 1.88%. Non-Life Insurance and Development Bank sectors saw considerable strength as the respective sub-indices jumped 4.31% and 3.48%. Trading, Manufacturing & Processing, Life Insurance and Banking sectors also rose by over 1% each. All other sectors saw modest gains.

Bank of Kathmandu Ltd led the list of actives with turnover of Rs 147 million. The commercial bank’s scrip saw significant buying interest after it announced 13 percent stock dividend and 3 percent cash payout for the year 2019/20. Next, Shikhar Insurance Company Ltd and Arun Valley Hydropower Development Co. Ltd posted turnovers of Rs 135 million and Rs 123 million. Nepal Reinsurance Co. Ltd and Neco Insurance Co. Ltd saw transactions of Rs 84 million and Rs 77 million. Mainly, other commercial banks were heavily traded.

Saptakoshi Development Bank Ltd was the biggest percentage gainer of the day. Its share price remained locked in the upper circuit of positive 10%. Kamana Sewa Bikas Bank Ltd and Multipurpose Finance Company Ltd also saw massive strength with advances of 9.63% and 9.6%. Corporate Development Bank Ltd, Dibyashwori Hydropower Ltd and Bank of Kathmandu Ltd also saw surge of over 9% each.

On the other hand, Mountain Hydro Nepal Ltd tanked to hit the lower circuit of 10%. Panchakanya Mai Hydropower Ltd and Himalaya Urja Bikas Company Ltd also took significant hit and tumbled over 6%. Universal Power Company Ltd, Rairang Hydropower Development Company Ltd and United Modi Hydropower Ltd fell 5%. Other energy stocks followed suit.

On the technical front, the index formed a strong bullish candlestick on the daily timeframe reflecting buyers prevailing in Thursday’s session. Besides, a rebound from 1,550 point’s mark points towards a possibility of extension of the uptrend further. Meanwhile, technical indicators suggest slightly neutral trend. Hence, a further advance stretching the rebound can provide opportunities to take buying positions in select sectors.

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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