KATHMANDU, July 9: Some selling pressure was evident in the initial trading hour as the Nepal Stock Exchange (Nepse) index traded 15 points lower in the morning. Nonetheless, stocks saw upbeat movement after mid-day as the market recouped earlier losses to trade slightly in the green. Subsequently, the market wavered close to its opening level throughout the remaining trading hours. The index ended the day with a modest gain of 4.57 points at 1,331.10.
Following Wednesday’s correction, the local bourse saw some sideways movement on Thursday as buyers and sellers remained evenly balanced on the day. Most of the stocks have seen positive movement after the resumption of trading at the end of June. Hence investors are cautiously waiting for a major impetus in the economic front to take major long positions in the market as stocks have climbed firmly higher against respective 52-week lows. Further, as the end of the fiscal year approaches, upcoming fourth quarter results of businesses will also be key as most of the period saw complete shutdown.The financials will provide a proper gauge of fundamentals which will likely have a major impact on the mid-term trend. Besides, market activity remained moderate with over Rs. 908 million worth of equities traded.
Barring two sectors, all major segments closed in green. Heavyweight banks which account for half of the market cap closed marginally lower. Trading sub-index dropped 2.11 percent. On the other hand, Mutual Fund units saw strength as the sub-index rose 2.94 percent. Manufacturing & Processing sector also closed 1.31 percent higher. ‘Others’, Life Insurance and Hotels segments added 1 percent each.
Nepal Reinsurance Company Ltd saw heavy transaction as over Rs. 151 million worth of its shares changed hands. Nepal Life Insurance Company Ltd posted a turnover of Rs. 94 million, while Chhimek Laghubitta Bittiya Sanstha Ltd registered a turnover of Rs. 64 million. NIC Asia Bank Ltd, NMB Bank Ltd and Himalayan Distillery Ltd were among other active scrips.
Three microfinance companies remained locked in the upper circuit of positive 10 percent including Suryodaya Laghubitta Bittiya Sanstha Ltd, Womi Laghubitta Bittiya Sanstha Ltd and newly listed NIC Asia Laghubitta Bittiya Sanstha Ltd. Guheshwori Merchant Bank & Finance Co. Ltd, NMB Microfinance Bittiya Sanstha Ltd and Tinau Mission Development Bank Ltd were the other major gainers.
Conversely, heavy loss came from Global IME Sammunat Scheme 1 which shed 3.85 percent on its unit price. National Hydropower Company Ltd and Ridi Hydropower Company Ltd gave up 3.7 percent and 3.49 percent, respectively. Shares of Sabaiko Laghubitta Bittiya Sanstha Ltd, Gurans Laghubitta Bittiya Sanstha Ltd and Kalika Laghubitta Bittiya Sanstha Ltd also came under considerable pressure.
Meanwhile, Ajod Insurance Ltd began floating its Initial Public Offering (IPO) shares from Thursday, July 9. The insurer will be floating 3 million units shares out of which 2.73 million units are allocated for the general public. The issuance will be open till July 13.
On the technical front, the market formed a small spinning top candlestick indicating lack of any real momentum towards either side on Thursday. The resistance of around 1,350 points mark has still held ground while the index has also kept from correcting further. Relative Strength Index (RSI) is trending in a neutral zone making more sideways movement likely. Nonetheless, the short term trend remains bullish and further upward movement can be expected if there is a momentous break of 1,350 points in the coming week.
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)