Weekly Market Commentary

Nepse ends higher after mid-March consolidation

Published On: March 26, 2021 07:50 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 26: Stocks witnessed a massive surge in the beginning of the week as the Nepalese share market’s benchmark shot up by 63.38 points on Sunday. The Nepal Stock Exchange (Nepse) index pulled back on Monday and fell 24.07 points. Further strength ensued as the index rose 14.55 points and 41.3 points on Tuesday and Wednesday. The index saw some correction on the last trading day of the week with a decline of 21.28 points on Thursday. Overall, the gain tally for the week stood at 73.88 points or 2.98% with Nepse ending at 2,548.97.

After a major retracement in the latter half of February, which extended till Mid-March, the index showed signs of a rebound with investors picking up stocks around 10 to 15 % down from their highs. Subsequently, volumes also improved in the week. Turnover in the review period was Rs. 29.6 billion compared to Rs. 20.5 billion in the week earlier.

Class ‘A’ stocks underperformed as reflected by a gain of only 1.39% in the Sensitive Index. Hotels and Tourism Index saw the biggest percentage gain in the week driven by Chandragiri Hills Ltd’s extended post-listing rally. The average jumped 26.25%. Trading sector also shot up by 24.22% backed by Salt Trading Corporation’s surge. Hydropower, Investment and Microfinance sub-indices also saw strength with advances of 8.83%, 7.09% and 6.88%. All other sectors ended in green.

On the corporate front, Siddhartha Insurance Ltd declared its dividend for the year 19/20 on Thursday. The non-life insurer said that it will be distributing 15.78% dividend, including 12% bonus shares and 3.78% cash payout. The company did not pay any dividend in the prior fiscal year. Meanwhile, more than 5 million unit bonus shares of Sunrise Bank Ltd were listed in the exchange in the week. The commercial bank had decided to distribute 5.8% bonus shares and 2.48% cash dividend for the year 19/20.

In terms of ARKS weekly technical analysis, the index formed a bullish candlestick stretching its prior week’s gains. While a rebound from 2,400 mark was witnessed, Nepse also faced resistance at 2,600 level. This indicates possibility of a range bound trading unless a break outside of 2,400-2,600 range is seen. The index may also see volatility subside in the coming weeks, as the weekly Bollinger Band indicator is in course of contraction.

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 thispublication)

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