Daily Market Commentary

Nepse closes higher for second straight day

Published On: December 11, 2018 08:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The benchmark Nepal Stock Exchange (Nepse) index opened on a positive note with and added more than 12 points in the beginning of Monday's trading. Despite a slight pullback in the afternoon, the index managed to rise towards the closing hours. Eventually, Nepse managed to hold on to a gain of 12.49 points to end the day at 1,144.19 points.

Following two straight days of gains, the index recouped all the losses that came on Thursday in the previous week. The increment in the index was also supported by a significant improvement in terms of market activity. Total turnover increased by over 95 percent to Rs 437 million against the day earlier. 

Majority of sub-indices posted moves to the upside following the broader market. 

Life Insurance, Microfinance and Non-Life Insurance sectors were the major contributor to the day's gain with the groups' sub-indices rising over 1.4 percent each. Hotels and Banking sub-indices also logged in gains of 1.37 and 1.34 percent, respectively. Development Banks, Finance and Hydropower stocks followed suit with their sub-indices closing slightly higher. In contrast, 'Others' and Manufacturing & Processing sub-indices edged towards red.

Market participation indicates Nepal Investment Bank Ltd posting the highest turnover on the day. More than Rs 54 million worth of the bank's shares changed hands after the company declared 18 percent bonus shares and 22 percent cash dividend to its shareholders. The respective decision is subject to approval from the Nepal Rastra Bank (NRB) and upcoming Annual General Meeting (AGM) of the company. After the adjustment of the bonus shares, the paid up capital will reach to Rs 12.56 billion. 

Further, Global IME Bank Ltd and Nepal Bank Ltd recorded turnovers of Rs 37 million and 33 million, respectively. Shares of Asian Life Insurance Co. Ltd Promoter Share, Chhimek Laghubitta Bittiya Sanstha Ltd and NMB Bank Ltd were the other active stocks in the day with turnovers of over Rs. 18 million apiece.

Shares of Rairang Hydropower Development Company Ltd was the biggest percentage gainer as its price surged almost 8 percent. Naya Nepal Laghubitta Bittiya Sanstha Ltd also posted a significant move to the upside with its share price gaining 6.80 percent. Similarly, Summit Microfinance Development Bank Ltd, Nepal Seva Laghubitta Bittiya Sanstha Ltd, Hathway Finance Company Ltd and Janaki Finance Ltd were among other top gaining stocks with gains of 5 percent each.

Mahila Sahayatra Microfinance Bittiya Sanstha Ltd turned in the worst performance for the day as it saw its share price plunge almost 7 percent. Laxmi Equity Fund units followed suit and plummeted 4.08 percent.  Meanwhile, Himalayan Distillery Ltd and Nagbeli Laghubitta Bikas Bank Ltd shed over 3 percent each.

On the announcements front, Api Power Company Ltd announced 5 percent bonus shares to its shareholders. In other news, Kailash Bikas Bank Ltd called for its annual general meeting on January 6 with approval of 17 percent cash dividend as its key agenda. Similarly, Manjushree Finance Ltd will be convening its annual general meeting on December 31. The meeting is also due to approve 9 percent cash dividend to the respective shareholders.

As per the ARKS technical analysis, the market formed a bullish candlestick for a second straight day erasing most of previous week's losses. Following the gains, technical indicators indicate a possible shift in momentum for the short run. However, a substantial turnaround from the overall downtrend is yet to be observed. 

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

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