Daily Commentary: Stocks see steady gains as investors shrug off pandemic fears

Published On: July 13, 2020 08:17 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 13: After shooting up by over 12 points in the initial trading on Monday, the Nepal Stock Exchange (Nepse) index pared its gains to trade flat at mid-day. Stocks then wavered around the opening level in the latter trading hours as Nepse ended slightly higher. The benchmark added 2.12 points to close at 1,342.40 points.

Nepse logged a gain for the third straight day.  Investors have continued to absorb intraday selling waves as the sentiment continues to remain upbeat. Besides, the market has found a strong footing in the current zone with daily turnovers of over Rs 1 billion in the trading days off late. Nonetheless, gains remain capped as the marginal movements can mainly be attributed to investors maintaining a cautious stance ahead of the impending monetary policy announcement in the beginning of the fiscal year 2020/21.

Most of the segments saw green. Only Hotels, Life Insurance, Finance and ‘Others’ stocks experienced a selling pressure to close slightly lower. Gains came mainly from the Microfinance sector with the group rising 2.2 percent. Mutual Fund group also saw strength as the index added 2.04 percent. Trading sub-index, meanwhile, rose 1.91 percent. All other segments eked out moderate gains.

Prabhu Bank Ltd Promoter share recorded the biggest turnover of the day with over Rs 107 million worth of the shares changing hands. Nepal Reinsurance Company Ltd and Nepal Life Insurance Company Ltd led the list of active stocks with turnovers of Rs 102 million and Rs 95 million, respectively. Himalayan Distillery Ltd, NIC Asia Bank Ltd and NMB Bank Ltd were among other actively traded shares.

Microfinance stocks dominated the gainers list for a second straight day. Nepal Seva Laghubitta Bittiya Sanstha Ltd and NIC Asia Laghubitta Bittiya Sanstha Ltd surged exactly 10 percent each. Following closely, Gurans Laghubitta Bittiya Sanstha Ltd, Suryodaya Laghubitta Bittiya Sanstha Ltd and Mithila Laghubitta Bittiya Sanstha Ltd jumped over 9 percent each. Nadep Laghubitta Bittiya Sanstha Ltd, Sanima Equity Fund and Grameen Bikas Laghubitta Bittiya Sanstha Ltd also closed firmly higher.

On the other hand, Oriental Hotels Ltd suffered the most, losing over 6 percent on its price. Ghalemdi Hydro Ltd and Sindhu Bikash Bank Ltd also struggled as both shares registered declines of over 5 percent each. Global IME Sammunat Scheme-1, Universal Power Company Ltd and Panchakanya Mai Hydropower Ltd were among other major losing securities posting losses of over 4 percent each.

In terms of ARKS technical analysis, as the market is witnessing a tight range bound movement, no notable swings in momentum is visible. Buyers slightly edged out sellers with the formation of a small bullish candlestick. While cautious trading has continued, a breakout of 1,350 points with considerable volume can provide decent opportunities to go long. Else, further sideways movement can be expected with support provided by 1,300 points level. Technical indicators reflect neutral to bullish sentiment prevailing in  the current context.

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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