Daily Commentary

Market sees active participation despite lockdown in order

Published On: August 24, 2020 07:48 AM NPT By: Republica  | @RepublicaNepal

Nepse benchmark index up 13 points

KATHMANDU, Aug 23: The stock market opened the week’s trading on a mildly positive note. The Nepal Stock Exchange (Nepse) index traded around 5 points higher in the morning. After a brief dip towards red at mid-day, the benchmark maintained positive bias throughout the latter trading hours. Following flat trading for most of the afternoon, a last hour rally led the Nepse to a gain of 12.77 points to settle at 1,410.34 points.

Following a modest gain of 6 points on Thursday, the index stretched its advance for a second straight day. While investor participation remained subdued in the previous trading day, Sunday’s advance was accompanied by substantial volume reflecting enthusiasm in the stock market. Turnover crossed the Rs 1 billion mark in the session.

Insurance stocks continue to see notable charm, which has helped the index hold ground in the sessions of late. Non-Life Insurance sector led the gains with a rally of 3.46 percent. Following closely, Manufacturing & Processing sub-index also surged 3.27 percent. Life Insurance stocks, similarly, saw considerable strength as the group’s sub-index closed over 2 percent higher. Hotels and Microfinance sub-groups followed suit with advances of over 1 percent each. Heavyweight banks rose 0.41 percent. Meanwhile, three sectors closed in red. Mutual Fund, Trading and Hydropower sub-indices inched lower.

Neco Insurance Co. Ltd led the list of active stocks with transactions worth over Rs 146 million. Shivam Cements Ltd and Nepal Reinsurance Company Ltd were also heavily traded as the respective stocks saw turnovers of Rs 72 million and Rs 67 million. Nepal Life Insurance Company Ltd, Prabhu Insurance Ltd and Nepal Insurance Company Ltd followed suit with turnovers of Rs 57 million, Rs 42 million and Rs 35 million.

On the gainers front, Samriddhi Finance Company Ltd stretched its rally with a 10 percent jump. Neco Insurance Co. Ltd also saw notable upside movement. Its share price shot up by 7.4 percent. Taragaon Regency Hotel Ltd and Premier Insurance Company Ltd closed up by around 6 percent each. Besides, mainly insurance scrips dominated the list of major gainers.

On the other hand, hydropower stocks came under the hammer. Leading the decliners, Panchakanya Mai Hydropower Company Ltd and Union Hydropower Ltd shed over 3 percent each. Sadhana Laghubitta Bittiya Sanstha Ltd, meanwhile, dropped 2.72 percent. Sanjen Jalavidhyut Company Ltd, Khani Khola Hydropower Company Ltd and Dibyashwori Hydropower Ltd were among other major losing scrips with losses of over 2 percent each.

In the news, the equity market saw the first dividend announcement for the year 2019/20.  Samata Laghubitta Bittiya Sanstha Ltd has declared 6.32 percent cash dividend and 20 percent stock dividend to its shareholders as per its notice to Nepse. The dividend proposal is subject to approval from Nepal Rastra Bank (NRB) and the company’s upcoming Annual General Meeting (AGM).

As per ARKS technical analysis, the index formed a bullish candlestick on Sunday, as gains accelerated compared to the previous trading day. Nonetheless, the sideways trend has prevailed with Nepse registering moves within a narrow range. Another bullish candlestick with sustained volumes will indicate a breakout from the current consolidation zone, making way for some more upside momentum. Technical indicators, meanwhile, reflect neutral sentiment with a slight bias towards positive territory.

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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