Daily market commentary

Insurance shares rise as Nepse extends gains

Published On: April 9, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 9: Stocks opened Monday's trading on a positive note. The Nepal Stock Exchange (Nepse) index traded slightly in the red in the morning before posting a rally after mid-day. Nepse reached as high as 1,197 points late in the afternoon but gave up some of its gains to close the day with a gain of 9.32 points at 1,191.68 points.

Strength remained visible throughout the day's trading. Despite some intermittent selling pressure, the index held its ground firmly in the green. The market is now up 4.4 points from 2019's opening level. Active trading was witnessed in the day as the bourse posted a total turnover of over Rs 906 million.

The broad rally saw most of the sectors climb higher, barring 'Others' and Hotels segments which dipped marginally. After the surge seen in banking stocks, investors embraced insurance stocks. Both Non-Life Insurance and Life Insurance sub-indices registered gains of 2.88 percent and 2.85 percent, respectively. Microfinance stocks followed suit as the group's sub-index also shot up by over 2 percent. Banking stocks eased slightly as the respective sub-index posted a modest gain of 0.47 percent.

NIC Asia Bank Ltd, which has seen a surge of almost 20 percent since late March, registered the highest turnover on the day. More than Rs 76 million worth of its shares changed hands. NMB Bank Ltd and Nepal Investment Bank Ltd posted turnovers of Rs 54 million and Rs 43 million, respectively.

Meanwhile, Neco Insurance Company Ltd saw a total transaction of Rs 42 million. Nepal Credit and Commercial Bank Ltd, Nepal Bank Ltd, and Prabhu Bank Ltd's shares were also actively traded.

Summit Microfinance Development Bank Ltd, among gainers, hit the upper circuit of 10 percent. Global IME Sammunat Scheme-1 closely followed with a surge of 9.80 percent. Besides, microfinance stocks witnessed significant strength as Swarojgar Laghubitta Bikas Bank Ltd and NMB Microfinance Bittiya Sanstha Ltd jumped over 8 percent each. Suryodaya Laghubitta Bittiya Sanstha Ltd, Vijaya Laghubitta Bittiya Sanstha Ltd and Chautari Laghubitta Bittiya Sanstha Ltd were among other top advances.

In contrast, hydropower stocks led the list of losing scrips as Radhi Bidyut Company Ltd and Universal Power Company Ltd tanked over 4 percent each. Similarly, Rastriya Beema Company Ltd Promoter Share and Sindhu Bikash Bank Ltd saw declines of over 3 percent each. Other losing scrips include Arun Kabeli Power Ltd, Api Power Company Ltd, and Shangrila Development Bank Ltd.

In the news, Jebils Finance Ltd received approval from Nepal Rastra Bank (NRB) to distribute 1.74 percent bonus shares to its shareholders. The class 'C' financial institution is in due process for acquisition by Nepal Investment Bank Ltd.

The index, as per the ARKS technical analysis, formed a bullish candlestick on the daily timeframe. Following a breakout of 1,165 points, Nepse is on its way to test the psychological resistance at 1,200 points mark.

Technical indicators also indicate fairly bullish momentum prevailing in the present context. Nonetheless, some retracement can be expected in the near term as the Relative Strength Index (RSI) has climbed towards overbought zone. Hence, investors should approach the market with some caution before taking any substantial long position in the secondary market.

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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