Daily market commentary

Nepse unchanged at 1,140 points

Published On: November 6, 2019 10:09 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Local stocks opened Tuesday's trading on a flat note with no notable movement posted by Nepal Stock Exchange (Nepse) index in the first half of the trading session. Despite some fluctuations in the latter half, the benchmark index remained bound within a point on the either side. Eventually, Nepse ended the day with a minor drop of 0.81 points at 1,139.45 points.

Following Tuesday's trading, Nepse has closed around 1,140 points for three straight days suggesting both buyers are sellers nullifying each other. Further, the trading range has notably narrowed down as opposed to the bearish volatility witnessed in the preceding months. Hence, the 5-month long downfall eventually seems to have lost steam which might make way for bulls to take over. 

However, investors are still approaching the market with caution keeping an eye for any meaningful impetus that can drive the index higher. First quarter earnings result is one of such fundamental elements that will likely have an impact in the market in the coming months.

In terms of market participation, the overall trading saw subdued enthusiasm from both buyers and sellers side. The bourse recorded a below par turnover of Rs 284 million.

Most of the sectors closed in the red but losses remained trivial. Non-Life Insurance and Finance sub-indices fell over 0.6% each. 'Others' sector closed 0.47% lower, while Hotels, Hydropower, Life Insurance and Development Bank saw meager losses. On the other hand, Mutual Fund sub-group rose 1.88%, followed by Manufacturing & 

Processing sub-index which added 0.69%. Banking and Microfinance sectors closed almost unchanged.

Prabhu Bank Ltd Promoter Share saw the biggest turnover of the session as more than Rs 39 million worth of the shares were exchanged on Tuesday. Salt Trading Corporation, correspondingly, saw turnover of Rs 26 million. Commercial banks were among other actives with Prabhu Bank Ltd, Everest Bank Ltd and Nabil Bank Ltd logging in transactions of Rs 15 million, Rs 14 million and Rs 12 million, respectively.

Mutual fund units of Global IME Sammunat Scheme saw the biggest gain of the day. The unit price shot up by 10%. Besides, mainly microfinance scrips saw strength with Civil Laghubitta Bittiya Sanstha Ltd, Naya Nepal Laghubitta Bikas Bank Ltd and Global IME Laghubitta Bittiya Sanstha Ltd posting advances of 5.62%, 5.07% and 4.82%, respectively. Goodwill Finance Co Ltd, Himalayan Distillery Ltd and NMB Hybrid 

Fund L-1 were among other top gainers.

In contrast, hydropower stocks dominated the list of decliners. Synergy Power Development Ltd suffered the most and tanked 10%. Dibyashwori Hydropower Ltd, similarly, tumbled 5.76%.

Reliance Finance Ltd also dropped over 5%. National Hydropower Company Ltd and Ankhu Khola Jalvidhyut Company Ltd's shares also came under pressure with each dropping over 3% apiece.

Among companies publishing their first quarter earnings results, Global IME Bank Ltd reported an outstanding 40% growth in its net profit to Rs 753 million on year-to-year basis. The increment comes following a remarkable improvement in its net interest income. Meanwhile, net profit of Forward 

Community Microfinance Bittiya Sanstha Ltd increased by a modest 4% to Rs 83 million with annualized per share earnings at Rs 88.73.

ARKS technical analysis indicates a doji candlestick formation on the daily time frame suggesting indecision prevailing. Nonetheless, as per the momentum indicators, bulls are slightly gaining control. Moving Average Convergence Divergence (MACD) is currently sloping upwards. However, since the move lacks any thrust, a clear direction is yet to be observed. For the short term, investors must keep a close eye on 1,150-point immediate resistance, the breach of which might see the index make further move to the upside.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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