Daily market commentary

Nepal Stock Exchange index closes week firmly higher

Published On: December 13, 2019 10:25 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 13: After showing lack of direction in morning trading, stocks witnessed significant strength after midday. The Nepal Stock Exchange (Nepse) index climbed to as high as 1,175 points in the afternoon, but pulled back slightly. At the close, the index was 11.17 points higher to end the day at 1,172.64 points.

The local bourse continued to see significant strength with the increasing turnover in recent sessions. The surge on the day was backed by investors continuing to accumulate insurance stocks. Market activity improved further as Rs 764 million worth of securities were traded on the day. Non-life Insurance, Life Insurance and Hydropower sub-indices led the day’s surge with a rally of 7.59%, 5.05% and 3.06%, respectively. The sub-indices of Banking, Development Bank, Finance and Mutual Fund groups managed to end the day in the upper side of spectrum. On the other hand, Trading and Manufacturing & Processing sectors posted declines of 3.58% and 2.03%, respectively. Meanwhile, Hotels, Others and Microfinance scrips edged marginally lower.

Among active stocks, Swabalamban Laghubitta Bittiya Sanstha Ltd Promoter Share witnessed the highest turnover on the day as more than Rs 82 million worth of the units changed hands on the day. Similarly, Deprosc Laghubitta Bittiya Sanstha Ltd, NMB Bank Ltd, Nepal Life Insurance Co Ltd, Nepal Bank Ltd, and Nepal Insurance Company Ltd logged transactions of over Rs 41 million, Rs 38 million, Rs 36 million, Rs 20 million, and Rs 18 million, respectively. Asian Life Insurance Co Ltd, Lumbini General insurance Co Ltd, National Life Insurance Co. Ltd and Prabhu Bank Ltd posted turnovers of over Rs 14 million each.

Mostly Insurance stocks led the list of gaining stocks on Thursday. Share prices of Everest Insurance Co Ltd, Surya Life Insurance Co Ltd, Himalayan General Insurance Co Ltd, and Sagarmatha Insurance Co Ltd hit the upper circuit of 10%. Shares of Himalayan Urja Bikas Company Ltd, IME general Insurance Co Ltd, Nepal Life Insurance Company Ltd, United Insurance Co Nepal Ltd, and Nepal Seva Laghubitta Bittiya Sanstha Ltd add above 97% on their share prices each. Conversely, stocks of Gurans Laghubitta Bittiya Sanstha Ltd and Salt Trading Corporation struggled tanked 4.7% and 4.6%, correspondingly. Meanwhile, share prices of Unilever Nepal Ltd, NMB Microfinance Bittiya Sanstha Ltd, Guheshowori Merchant Bank & Finance Co Ltd, and Dibyashwori Hydropower Ltd fell by more than 3% each.

In corporate space, Sanima Mai Hydropower Ltd has proposed to distribute 10% bonus shares to its shareholders for FY2018/19. It is closing its shareholders’ book for the purpose of holding AGM from December 23. 

Among finance companies, Pokhara Finance Co Ltd and Manjushree Finance Company Ltd have announced their annual dividends. While the former has declared 7% bonus shares and 7.2% cash dividend, the latter has decided to provide 1.75% bonus shares and 9.8% cash dividend.

As per ARKS technical analysis, the index formed a bullish candlestick on the daily timeframe extending its gaining streak. With the progress, the index has managed to hold its ground above 1,150-point mark which has acted as a resistance in the past months. Further, Moving Average Convergence Divergence (MACD) has climbed into positive zone, indicating a shift in short-term trend. Though, Relative Strength Index (RSI) has reached overbought zone. Hence, cautious buying is suggested for the investors at the current juncture.

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