Daily Market Commentary

Nepse ends slightly higher; microfinance stocks gain

Published On: June 28, 2021 06:41 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 28: The Nepal Stock Exchange (Nepse) index opened Monday’s session firmly in green and traded above 2,900 mark briefly. Despite slight correction in the beginning hour, Nepse traded mostly in green in the first half of the session. Stocks plateaued thereafter with a final hour dip dragging the index in the negative territory. A last minute recovery helped the index close with a gain of 5.11 points at 2,875.50. 

The bourse extended its gains for a second straight day, stretching its rebound after mid-June sell-off. With most of the stocks correcting sharply, the equity market has found some footing in the sessions of late. However, turnover has remained in the lower side of the spectrum. The bourse witnessed a relatively modest transaction of Rs. 7.73 billion.

Composite sectors turned in mixed performance. Microfinance and Investment sub-indices led the advances and shot up by over 2% each. Hotels & Tourism, Banking, Mutual Fund and Life Insurance sub-indices eked out modest gains. On the other hand, Finance sector came under pressure as the respective sub-index tanked 2.59%. Hydropower stocks also struggled and dipped 2.23% on average. Development Bank sub-index fell 1.68%. Trading, Manufacturing & Processing, Non-Life Insurance and ‘Others’ sub-indices ended marginally lower. 

Shares of Upper Tamakoshi Hydropower Ltd were traded the most with turnover of Rs. 669 million. Nepal Insurance Company Ltd, Radhi Bidyut Company Ltd and NIC Asia Bank Ltd followed suit with turnovers of over Rs. half billion each. Century Commercial Bank Ltd, Hydroelectricity Investment and Development Company Ltd, Nepal Reinsurance Company Ltd and National Hydropower Company Ltd were among other actively traded stocks.

Microfinance stocks dominated the list of gainers. Sabaiko Laghubitta Bittiya Sanstha Ltd and Civil Laghubitta Bittiya Sanstha Ltd were the major gainers with both scrip rallying over 8%. Hydroelectricity Investment and Development Company Ltd also jumped 7.63%. Samudayik Laghubitta Bittiya Sanstha Ltd, Mithila Laghubitta Bittiya Sanstha Ltd and Asha Laghubitta Bittiya Sanstha Ltd closed more than 4% higher. 

Best Finance Company Ltd and Reliance Finance Company Ltd, conversely, fell the most with both scrip closing around 5% lower. Radhi Bidyut Company Ltd and ICFC Finance Ltd dropped 4.68% and 4.53%. Panchakanya Mai Hydropower Ltd, Kalika Power Company Ltd, Guheshwori Merchant Bank & Finance Co. Ltd were among other major losers with declines of over 4% each. 

As per the ARKS technical analysis, the market formed a small bearish candlestick after closing below the opening level. Nonetheless, against previous day’s close, the index added more than 5 points. Hence, some indecision is witnessed with modest movements of late. Momentum indicators also suggest slightly bearish to neutral sentiment prevailing in the current context. Hence, further consolidation can be expected in the current juncture with immediate support at 2,835 mark. 

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 this publication)

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