Daily Commentary: Nepse stretches winning streak

Published On: July 16, 2020 08:45 AM NPT By: Republica  | @RepublicaNepal

Nepse benchmark index jumps 14.9 points

KATHMANDU, July 16: The stock market observed another upbeat session as Nepal Stock Exchange (Nepse) benchmark traded in green throughout Wednesday’s trading hours. 

After gaining 10 points in the morning, the index retraced slightly at mid-day. After trading flat for about an hour, the index witnessed a decent advance in the latter trading hours. The benchmark index went up 14.9 points to close at 1,362.34 points. 

The day’s advance marked Nepse’s fifth straight session of gain. After facing a massive slump ahead of the lockdown, the index has been witnessing a decent recovery fueled mainly by hopes of economic recovery. Further, as business investments in the recent scenario have stagnated, liquidity among banks and financial institutions (BFIs) have swollen which has led to increased investments in the stock market. On the day, investors focused mainly on banking stocks as the heavyweights helped the index notch its fresh post-lockdown high. Turnover also improved further as the bourse experienced a turnover of Rs 1.16 billion.

Sectors maintained a positive bias with most closing in green. Banking stocks outperformed notably as the index rose 2.16 percent. Mutual Fund index closely followed with a gain of 2.1 percent. Trading and ‘Others’ sub-index also added 1.5 percent each. Finance, Hydropower, Development Bank and Non-Life Insurance also edged higher on the day. On the other hand, Hotels stocks came under considerable pressure and tanked 3 percent. Manufacturing & Processing, Life Insurance and Microfinance sub-groups saw modest losses.

NIC Asia Bank Ltd’s shares were traded the most. Over Rs 104 million worth of the bank’s shares changed hands. Nepal Reinsurance Company Ltd and NMB Bank Ltd were also heavily traded with turnovers of Rs 97 million and Rs 86 million, respectively. Nepal Life Insurance Company Ltd, Himalayan Distillery Ltd and Laxmi Bank Ltd were among other actively traded stocks.

Three securities closed near the upper circuit limit on Wednesday. NIC Asia Laghubitta Bittiya Sanstha Ltd, Nabil Balanced Fund-2 and Best Finance Company Ltd shot up by over 9 percent each. Gurans Laghubitta Bittiya Sanstha Ltd, NIC Asia Balanced Fund and Nepal Bangladesh Bank Ltd posted gains of over 7 percent each.

In contrast, Mithila Laghubitta Bittiya Sanstha Ltd saw the biggest percentage decline as its share price dropped 5.45 percent. Progressive Finance Ltd, Taragaon Regency Hotels Ltd and Soaltee Hotel Ltd followed the suit with losses of over 4 percent each. Himalayan Urja Bikas Company Ltd, Suryodaya Laghubitta Bittiya Sanstha Ltd, Ganapati Microfinance Bittiya Sanstha Ltd and Swadeshi Laghubitta Bittiya Sanstha Ltd fell over 3 percent apiece.

On the technical front, the equity index formed a bullish candlestick and closed slightly above the resistance zone at 1,350-1,360 points zone. A confirmation with bullish candlestick on Thursday will validate further upward movement towards 1,400’s level. Further both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have tilted upwards from the neutral territory suggesting bulls gathering momentum. Failure to maintain 1,600-level might see the index make a decent 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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