Weekly Market Commentary

Nepse ends in green for four straight weeks

Published On: April 10, 2021 08:18 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 10: Stocks kicked off week on a positive footing with the Nepal Stock Exchange (Nepse) climbing more than 25 points on Sunday. After closing a point higher on Monday, the index saw further gains at mid-week. The benchmark rose around 16 points on Tuesday. The bourse saw modest movements on the latter part of the week with the index falling 2.85 points on Wednesday and adding 2.74 points on Thursday. Overall, the index ended the review period 42.46 points or 1.61% higher at 2,674.36.

The stock market has continued to see decent upward movement since the end of February-March sell-off. While heavyweight banks are yet to reach their all-time highs, notable rallies in hydropower, microfinance and insurance stocks have pushed the index towards fresh high. Volumes have also increased of late with average daily turnover of over Rs. 7 billion, signaling enthusiasm in the equity market.

Class ‘A’ stocks outperformed the broader index as the Sensitive Index rose 2.17%. In terms of composite sectors, most of the segments ended the week higher while only few posted losses in the review period. Trading sub-index fell the most with the sector leader Salt Trading Corporation registering significant decline in the week. The trading company announced 25% dividend for the year 19/20, including 20% bonus shares and 5% cash payout. In the earlier year, it had distributed 25% bonus shares and 10% cash dividend. Investment sub-index, subsequently, fell 2.63%, while Non-Life Insurance and Life Insurance segments saw modest dips.

On the gainer’s front, Hotels and Tourism sector experienced significant buying interest and rallied more than 15%. Microfinance and Finance segments also rallied more than 6% each. Hydropower stocks also saw strength and shot up by over 5%. Development Bank sector rose 3.73%, while ‘Others’ sub-index added 2.98%. All other groups ended the week higher.

On Friday, Excel Development Bank Ltd announced 12.63% dividend for the year 19/20 to its shareholders. The dividend includes 12% bonus shares and 0.63% cash payout.

In terms of ARKS technical analysis, the market formed a bullish spinning top candlestick on the weekly timeframe. This reflects slight indecision after rally of more than 200 points. Hence, some consolidation or correction in the coming weeks is highly likely. Meanwhile, given the index holds ground above 2,600 level, some upward movement is also plausible. Momentum indicators also indicate slightly bullish sentiment prevailing in the present context.

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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