Daily Market Commentary

Nepse gains for third straight day

Published On: December 17, 2018 10:23 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 17: The market saw significant strength on the first trading day of the week. Stocks trading began on a positive note on Sunday as the benchmark Nepal Stock Exchange (Nepse) rallied almost 20 points by midday. The index pulled back slightly from its intraday high of 1168.75 later in the afternoon. However, a short spike toward the close saw the Nepse index hold on to a gain of 18.89 points, or 1.64 percent, to close the day at 1,167.67 points.

The gains came on the heels of investors taking significant long positions in insurance and banking scrips, which are trading at some of the lowest levels in the last three years. Market participation also saw a noteworthy improvement as the market posted a total turnover of Rs 474 million compared to Rs 323 million in the previous trading session. 

Non-life Insurances stocks led the day's broad rally as the group's sub-index shot up by more than 3.29 percent. Microfinance and Life Insurance sub-indices went up by 2.96 percent and 2.59 percent, respectively. Hotels sub-index also ended the day in green posting a gain of 1.77 percent. Meanwhile, market heavyweight commercial banks also saw considerable strength as the segment's sub-index rose by 1.74 percent. All other sub-indices, except Manufacturing & Processing, which dropped by 0.38 percent, ended the day in green.

Among actively traded stocks, Chhimek Laghubitta Bikas Bank Ltd and Nepal Bank Ltd posted substantial turnover of Rs 57 million and Rs 53 million, respectively. Next on the list of active stocks was Nepal Investment Bank Ltd which saw turnover of Rs 27 million. Similarly, IME General Insurance Promoter Shares worth Rs 26 million were traded on the day. Shares of Bank of Kathmandu Ltd were also traded actively after the Class 'A' bank announced 14 percent bonus shares and 11 percent cash dividend to its shareholders on Friday. NMB Bank Ltd, Nepal Credit and Commercial Bank Ltd and Prabhu Bank Ltd were the other companies logging notable share transactions.

Mirmire Laghubitta Bittiya Sanstha Ltd led the list of advances as its share price hit the upper circuit of 10 percent. Other microfinance scrips followed suit as share prices of Arambha Microfinance Bittiya Sanstha Ltd and Kalika Laghubitta Bittiya Sanstha Ltd also rallied by almost 10 percent on Sunday. Furthermore, shares of Taragaon Regency Hotel Ltd and Rastriya Beema Company Ltd Promoter Share jumped by over 8 percent each. 

Energy sector stocks dominated the list of losing scrips. Stock prices of Rairang Hydropower Development Company Ltd, Nepal Hydro Developers Ltd and Arun Kabeli Power Ltd tumbled by over 4 percent each. Shares of Shine Resunga Development Bank Ltd and Synergy Power Development Ltd also came under pressure and shed over 2 percent each.

On the corporate front, Nepal SBI Bank Ltd has declared 15.79 percent dividend on Sunday. The payout includes 5 percent bonus shares and 10.79 percent cash dividend. Besides, Siddhartha Bank Ltd has scheduled its annual general meeting (AGM) for January 7. Distribution of 5 percent bonus shares and 8.16 percent cash dividend is one of the agendas of the meeting.

ARKS technical analysis indicates the market forming a bullish candlestick on the daily timeframe, erasing all the losses since early December. Meanwhile, the short-term sentiment seems slightly bullish as indicated by technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD). Nonetheless, the zone of around 1,170 points acts as an immediate resistance for the market. Its breach might see the index surge further toward the 1,200-point mark.

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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