Daily market commentary

Nepse closes higher for third straight day

Published On: October 25, 2019 08:17 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks traded in green since the beginning of trading on Thursday. The benchmark Nepal Stock Exchange (Nepse) index saw modest gain in the initial trading and continued the momentum till midday. The benchmark index eventually closed the last trading day of the week 6.73 points higher at 1149.34 points.

With the market plummeting to some of the lowest level, investors have begun gathering stocks at cheap prices contributing to steady advance witnessed over the past three trading days. The total turnover has also shown improvement with shares worth Rs 327 million traded on the day.

Except Non-life Insurance sector which was down marginally, most of the sectors closed the day in green. ‘Others’ and Finance sub-indices logged gains of 1.33% and 1%, respectively, while Manufacturing & Processing and Hotels sub-indices were up by 0.69% each. All other sub-indices eked out marginal gains.

Among active securities, shares of Machhapuchhre Bank Ltd were traded the most. Over Rs 71 million worth of shares of the class ‘A’ bank changed hands on the day. 

NIC Asia Bank Ltd and Prabhu Bank Ltd registered turnovers of Rs 34 million and Rs 19 million, respectively. Siddhartha Bank Ltd, Rasuwagadhi Hydropower Company Ltd and Nepal Bank Ltd also recorded transactions of over Rs 11 million each.

Among gainers, Arun Valley Hydropower Development Co Ltd was the best performer of the day as its share price rallied 8.33%. Share prices of Synergy Power Development Ltd, NMB Microfinance Bittiya Sanstha Ltd and Mountain Hydro Nepal Ltd were also up by over 6% each. Other top advances include Reliance Finance Ltd, NIBL Samriddhi Fund 1 and Ganapati Microfinance Bittiya Sanstha Ltd.

On the other hand, share prices of Arun Kabeli Power Ltd, Rastriya Beema Company Ltd Promoter Share and Khanikhola Hydropower Co Ltd were down by 5.79%, 5.09% and 5.08%, respectively. 

Goodwill Finance Co Ltd, City Express Finance Co Ltd, Universal Power Company Ltd and Prudential Insurance Co Ltd also down by at least 2% each.

In corporate space, RMDC Laghubitta Bittiya Sanstha Ltd has declared 12.5% bonus shares and 12.5% cash dividend for Fiscal Year 2018/19. The proposal is subject to approval of the Nepal Rastra Bank and the micro lender’s upcoming AGM. Among companies publishing the first quarter financials for FY2019/20, Kanchan Development Bank Ltd and Sparsha Laghubitta Bittiya Sanstha Ltd have reported net profit growth of 16.74% and 277.41%, respectively.

ARKS technical analysis indicates the market forming a third bullish candlestick on the daily timeframe. It indicates that the buyers have remained active in the recent sessions overcoming the sellers. 

Meanwhile, the market is also testing its 20-day Exponential Moving Average (EMA) resistance at around 1,150 points level. Its breach might see some upward movement in the market. 

However, a breach of 1,180-point resistance with significant volume will only validate the rebound further.

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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