Weekly Market Commentary

Nepalese stocks market climbs 48 points in the final week of 2020

Published On: January 2, 2021 06:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 2: The local bourse saw notable weakness in the beginning of the week with the Nepal Stock Exchange (Nepse) index shedding 40 points on Sunday. The index found some stability at mid-week with advances of 8 points and 5 points, respectively. Thereafter, investors showed considerable enthusiasm in taking long positions pushing the index 49 points higher on Wednesday. Stocks extended gains on Thursday with another 25-point rise. Overall, the benchmark index added 48.65 points or 2.39% to end the review period at 2,087.28.

After a highly volatile week earlier where the index gyrated between 1,880 and 2,120 mark amidst political uncertainty, the stock market witnessed relatively subdued trading week. Despite positive sentiment prevailing in the trading sessions, marker participation remained on the lower side of the spectrum. In the week on review, only Rs. 22 billion worth of shares were traded in the equity market compared to Rs. 34 billion of turnover in the week earlier.

Class ‘A’ stocks also saw considerable strength with the Sensitive Index rising 3.09%. Sectors ended mixed. Trading sub-index rallied the most with a surge of 16.21%. Manufacturing & Processing sector also saw notable buying pressure and added 12.35%. ‘Others’ index rose 6.60%. Banking sub-index climbed 2.44%. Microfinance, Mutual Fund and Finance stocks also ended week in positive territory. Conversely, Hotels sector led the losses as the group’s sub-index fell 5.62%. Life Insurance, Hydropower, Development and Non-Life Insurance sub-indices closed over 1% lower.

Shares of Nepal Life Insurance Company Ltd were traded the most with turnover of over Rs. 1.87 billion. Nabil Bank Ltd, NIC Asia Bank Ltd and Shivam Cements Ltd were the other active stocks with turnovers of Rs. 1.6 billion, Rs. 1.3 billion and Rs. 1.2 billion, respectively. Himalayan Distillery Ltd, Citizen Investment Trust and Nepal Reinsurance Company Ltd were the other heavily traded shares.

In terms of ARKS weekly technical analysis, the index formed a small bullish candlestick as the index closed 2020 at a fresh high. Nonetheless, the index has faced resistance at 2,100 level for a few times in the recent month. Hence, a breach of the psychological mark is crucial for the index to stretch the uptrend further. Else, a consolidation around the current zone can be expected in the weeks to come. Momentum indicators, meanwhile, reflect that the medium term uptrend is still intact.

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 thispublication)

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