KATHMANDU, Jan 7: Sentiments remained considerably bullish throughout Monday's trading as the Nepal Stock Exchange (Nepse) index surged more than 15 points in the initial trading hour. The major benchmark pulled back for a couple of times but closed the day notably higher. Nepse ended Monday's trading at 1,200.69 points – up 18.26 points against the session earlier.
With the day's advance, the index notched its best day since September 19. The gains came mainly on the back of strength seen in heavyweight banking sectors which helped the broad index close above 1,200 points level. The rally was also backed by an increment in market activity as total turnover jumped to Rs 842 million against Rs 712 million on Sunday.
Following some good performance from insurance and microfinance scrips in the month of December, investors are now eying commercial bank segment which is yet to see a major recovery after a 6 month slump starting June 2019.
The broad rally drove all major sectors higher, barring Trading segment. Market bellwether banks were the go to stocks for investors on the day. Subsequently, banking sub-index rallied 2.46 %. Microfinance sector closely followed with a 1.97 % rise, while Mutual Fund sub-index added 1.65 %. Sub-indices of development bank and 'Others' sector posted gains of 0.82 % and 0.54 %, respectively. All other sectors closed the day marginally higher.
Among actives, shares of NIC Asia Bank Ltd were traded the most with a turnover of Rs 85 million. Next, Grameen Bikas Laghubitta Bittiya Sanstha Ltd saw a turnover of Rs 39 million, while Neco Insurance Co. Ltd and Shivam Cements Ltd posted transactions of Rs 37 million each. Machhapuchhre Bank Ltd, Prabhu Bank Ltd and Nepal Life Insurance Company Ltd were among other top turnover stocks of the day.
Among major advances, Womi Laghubitta Bittiya Sanstha Ltd stretched its rally for a second consecutive day hitting the upper circuit of positive 10 %. The microfinance declared 20 % bonus shares and 6 % cash dividend for the year 18/19 on Monday. Other microfinance scrips followed. NMB Microfinance Bittiya Sanstha Ltd jumped 7.14 %, while Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd and Gurans Laghubitta Bittiya Sanstha Ltd rose over 6 % each. Civil Laghubitta Bittiya Sanstha Ltd, Swarojgar Laghubitta Bikas Bank Ltd and Global IME Laghubitta Bittiya Sanstha Ltd were the other major gainers closing over 5 % higher each.
On the other hand, Neco Insurance Co. Ltd slumped 5 % after the non-life insurer said it will be distributing 8.42 % cash dividend to its shareholders for the year 2018/19. It had announced 12 % stock dividend in the year earlier. Further, energy scrips – National Hydropower Company Ltd and Himalaya Urja Bikas Company Ltd posted losses of around 3.7 % each. Nepal Seva Laghubitta Bittiya Sanstha Ltd, likewise, fell 3.51 %.
Other major decliners for the day include Universal Power Company Ltd, Guheshowori Merchant Bank & Finance Co. Ltd and Salt Trading Corporation which shed over 2 % apiece.
On the technical front, the Nepse index stretched its gains with another bullish marubozu candlestick formation on the daily timeframe. This indicates bulls dominating the entire session on Monday. Other technical indicators also suggest the market rallying with notable momentum.
Given Nepse holds ground above 1,200 points mark in the following sessions with active volume, the index will further stretch its rally. However, some corrections can also be expected on the way which can give an opportunity for investors to buy in the dips.
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)