Daily market commentary

Nepse breaks 4-day losing streak, partially erasing previous day's losses

Published On: August 20, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 20: Weakness carried over to morning trading on Monday as the Nepal Stock Exchange (Nepse) index traded slightly in the red in the beginning trading hour. However, stocks witnessed a substantial rally after mid-day as the market climbed around 15 points in the afternoon. Following a retracement in the final trading hour, the benchmark index closed the day with a gain of 7.23 points at 1,222.06 points.

Nepse witnessed a relatively volatile day as the index gyrated almost 20 points during Monday's trading. Despite the index surging in the afternoon, the gains were truncated by slight selling pressure seen towards the session's end as some indecision is still visible in the bourse. Turnover improved slightly but remained under par. Rs 389 million worth of shares changed hands on the day.

All major sectors, barring the non-life insurance segment, closed the day higher. Microfinance stocks led the day's advance with a gain of 1.43 percent. Development Bank and Life Insurance sub-indices followed suit and added 0.85 percent and 0.78 percent, respectively. Heavyweight banking stocks also saw considerable strength as the group's sub-index closed 0.67 percent higher. Besides, all other sectors saw moderate gains on the day.

In terms of market activity, Siddhartha Bank Ltd Promoter Share was the most traded stock on the day with the total transaction of over Rs 25 million. Likewise, Rasuwagadhi Hydropower Company Ltd and NIC Asia Bank Ltd logged in a total turnover of over Rs 21 million and 17 million respectively. Soaltee Hotel Ltd and Agriculture Development Bank Ltd followed suit with a turnover of over Rs 16 million each.

Shares of Nadep Laghubitta Bittiya Sanstha Ltd led the list of gainers. It share price rallied over 7 percent. Similarly, Support Microfinance Bittiya Sanstha Ltd and Global IME Laghubitta Bittiya Sanstha Ltd rose over 6 percent each. Stocks of Excel Development Bank Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd followed suit with gains of over 5 percent apiece.

Among losers, the unit price of Sanima Equity Fund led to the decline. The mutual fund price sank 3.57 percent. Shares of Joshi Hydropower Development Company Ltd, United Insurance Co. Nepal Ltd, Guheshowori Merchant Bank & Finance Co. Ltd and Barun Hydropower Co. Ltd dropped over 2 percent each.

Among companies publishing fourth quarterly reports, Unilever Nepal Ltd and Himalayan Distillery Ltd reported year-on-year net profit growth of 6.75 percent and 75 percent, respectively. Their net profit stands at Rs 1.06 billion and Rs 514 million. In terms of insurance companies, Neco Insurance Company Ltd, National Life Insurance Company Ltd and Asian Life Insurance Company Ltd posted moderate growth in their net profits.

In terms of announcements, Nagbeli Laghubitta Bittiya Sanstha Ltd has announced the 26 percent bonus shares to their shareholders from the net profit of FY 2018/19. The distribution of proposed bonus shares is subject to approval from the upcoming Annual General Meeting (AGM) of the company.

As per the ARKS technical analysis, the market formed a bullish candlestick as the index rebounded from 1,215 points mark where minor support is visible. Relative Strength Index (RSI) has also reverted upward from the oversold zone while Moving Average Convergence Divergence (MACD) line's dip has eased slightly. Hence, given the market holds ground above the current level, further upward movement can be expected. On the other hand, a breach of the 1,215 points mark might see the index test its psychological support at 1,200 points.

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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