Daily market commentary

Nepse above 1,150 points

Published On: December 11, 2019 10:08 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks witnessed some volatility on Tuesday as the benchmark equity index revolved between gains and losses in the session. The Nepal Stock Exchange (Nepse) index opened on a firm note gaining over 9 points over the first trading hour. The index pared most of its gains by mid-session and fell below 1,150 points mark. Nonetheless, a rise toward the close saw the index end the day with a modest gain of 2.48 points at 1,151.36 points.

The secondary market has succeeded to hold ground above the psychological resistance of 1,150 points. Turnover has also continued to improve as Rs 498 million worth of shares were traded on the day. 

Majority of sectors closed the day in the upper side of the spectrum except Others, Hydropower, Manufacturing & Processing, and Non-Life Insurance sub-indices which fell by 1.68%, 0.48%, 0.38%, and 0.07%, respectively. Trading and Hotels sub-index, however, registered gains of 4.97% and 1.57%, respectively. Likewise, Banking, Development Bank, Finance, Microfinance, Life Insurance and Mutual Fund sub-indices also posted gains.

Machhapuchhre Bank Ltd and NMB Bank Ltd were the most active stocks of the day as over Rs 75 million and Rs 38 million worth of their shares, respectively, changed hands. Similarly, Agricultural Development Bank Ltd and Deprosc Laghubitta Bittiya Sanstha Ltd saw Rs 27 million and Rs 13 million worth of shares traded, respectively. Agricultural Development Bank Ltd has also proposed to distribute 6% bonus shares and 24% cash dividend to its shareholders. The decision, however, is subject to approval of the bank's upcoming annual general meeting (AGM). Nepal Bank Ltd, Soaltee Hotel Ltd and Prabhu Bank Ltd also saw over Rs 11 million worth of shares traded each.

Naya Nepal Laghubitta Bikas Bank Ltd and Support Microfinance Bittiya Sanstha Ltd shares led the list of gainers on the day. Their share prices surged by around 9% each. Naya Nepal Laghubitta Bittiya Sanstha Ltd has decided to provide 20% bonus shares for its shareholders for FY2018/19. The microfinance institution will be convening its AGM on January 4, 2020. It will closed shareholders' book from December 19. Share prices of Mountain Hydro Nepal Ltd, Salt Trading Corporation and Lumbini Bikas Bank Ltd went up by over 6% each.

In contrast, Arun Kabeli Power Ltd saw its share price fall by 4.09%. Shares of National Hydro Power Company Ltd, Ankhu Khola Jalabidhyut Company Ltd, Adhikhola Laghubitta Bittiya Sanstha Ltd, Sindhu Bikas Bank Ltd, Taragaon Regency Hotel Ltd and Arun Valley Hydropower Development Co Ltd also struggled and went down by 3% each.

On the announcement front, Taragaon Regency Hotel Ltd has announced it will distribute 12% cash dividend to its shareholders for FY2018/19. 

As per the ARKS technical analysis, the market formed a spinning top bullish candlestick on the day. This shows that the market lacks conviction in the present scenario. Nonetheless, the secondary market has succeeded to close above 1,150 points mark with improved turnover on Tuesday. Hence, the market needs to maintain this mark with noteworthy volume for upward movement in the forthcoming days.

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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