Daily market commentary

Nepse extends gain with 10 point advance

Published On: October 2, 2019 09:17 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks traded in the green since the beginning of Tuesday's trading session. The Nepal Stock Exchange (Nepse) index saw modest gain in the initial trading hour and continued to rise till afternoon. The upswing lost steam in the latter half of the trading session. The benchmark index, however, managed to hold on to its earlier gain to close the day at 1,145.69 points. 

After a gain of 10 points on Monday, Tuesday replicated the trading with another 10 point jump. With the market dropping to some of the lowest level, investors have begun accumulating stocks at cheap prices contributing to steady advance witnessed in the two trading days. Market activity increased on the back of high volume transaction of Nepal Bangladesh Bank Ltd Promoter Share. Total turnover stood at Rs 311 million.

Most of the sectors closed the day in green, while only Manufacturing & Processing, Hotels and Mutual Fund segments gave ground. Finance and 'Others' stocks posted some of the best performances of the day. The respective sub-indices registered gains of 1.71 percent and 1.43 percent, respectively. 

Heavyweight banks also helped the broader index climb higher. The group's sub-index rose 1.23 percent. Non-Life Insurance sub-index, similarly, closed up 1.17 percent. All other sub-indices posted modest moves to the upside.

Among actives, Nepal Bangladesh Bank Ltd Promoter Shares were traded the most. The scrip saw a total turnover of over Rs 70 million. Shivam Cements Ltd and Nepal Investment Bank Ltd Promoter Share registered turnovers of Rs 43 million and Rs 33 million, respectively. Mega Bank Ltd, Nepal Telecom Company Ltd and Himalayan Distillery Ltd were among other top turnover scrips with transactions of at least Rs 10 million each.

In terms of gainers, Synergy Power Development Ltd witnessed the best performance of the day. Its share price rallied almost 7 percent. Shares of United Finance Ltd and Reliance Finance Ltd closely followed with corresponding advances of 6.59 percent and 6.36 percent. Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd also shot up by 6 percent. Other top advances include Central Finance Co Ltd, Himalayan Bank Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd.

On the other hand, shares of Saptakoshi Development Bank Ltd suffered the most and tanked 9 percent. Shivam Cements Ltd fell 5.45 percent after the cement manufacturer announced its dividend for the year 2018/19. As per its notice to Nepse, the company has proposed 15.78 percent cash payout to its shareholders. 

Similarly, Oriental Hotels Ltd also slumped 3.12 percent on its dividend announcement. The hotel has declared 10.79 percent cash dividend and 5 percent bonus shares for the year. Shares of Multipurpose Finance Company Ltd, Sanjen Jalavidhyut Company Ltd and Tinau Mission Development Bank Ltd also came under pressure with declines of around 3 percent each.

Global IME Bank Ltd also proposed its dividend for the year. The bank will be endorsing 12.75 percent cash dividend and 12.75 percent bonus shares to its shareholders.

ARKS technical analysis indicates the market forming a second bullish candlestick on the daily timeframe. Buyers have remained active in the recent sessions overcoming the sellers. Moving Average Convergence Divergence (MACD) has also formed a golden crossover which points towards a possibility of a reversal. A breach of 1,280 points resistance with remarkable volume will substantiate 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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