Daily Market Commentary

Nepse hits fresh high as BFIs lead charge

Published On: June 3, 2021 07:58 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 3: After inching close to all-time high in the prior day, the Nepal Stock Exchange made a fresh record on the last trading day of the week. The benchmark climbed more than 35 points in the morning before registering a minor retracement at mid-day. Further gains followed in the latter trading hours as the index closed the session slightly off its intra-day high at 2,856.77. The day’s gain stood at 29.64 points. 

Even though some of the sectors witnessed correction, strength seen in BFIs helped index notch a fresh closing high above 2,850 mark. Besides, interest seen in financial sectors also drove the volumes higher. Almost Rs. 17 billion worth of equities changed hands on the day.

Most of the sectors ended the day in green with strength seen mainly in Development Bank, Finance and Hotels and Tourism Index. The corresponding sub-indices ended more than 3% higher. Heavyweight banking stocks also jumped 2.71%. Mutual Fund, Manufacturing & Processing, Microfinance, Investment and Life Insurance sectors also ended in green. On the other hand, hydropower sector corrected sharply with the index dropping 2.04%. Non-Life Insurance, ‘Others’ and Trading segments also ended in negative territory. 

Shares of Nepal Reinsurance Company Ltd led the list of top turnover scrips for a second consecutive day. Over Rs. 1 billion worth of the reinsurer’s shares changed hands. Chhimek Laghubitta Bittiya Sanstha Ltd and Lumbini Bikas Bank Ltd were the other actives with turnovers of Rs. 682 million and Rs. 351 million. Nepal Bangladesh Bank Ltd, Nepal Infrastructure Bank Ltd and Shivam Cements Ltd followed suit, registering transactions of over Rs. 32 million each. Sanima Mai Hydropower Ltd, Jyoti Bikas Bank Ltd and Mega Bank Ltd were also heavily traded on Thursday. 

Manjushree Finance Ltd and Mahila Laghubitta Bittiya Sanstha Ltd were the leaders as both scrips remained locked in the upper circuit limit of 10%. Gurkhas Finance Ltd and Green Development Bank Ltd surged almost 10% each. Shine Resunga Development Bank Ltd, Laxmi Bank Ltd and Saptakoshi Development Bank Ltd, meanwhile, closed the session more than 7% higher. Other banks and development banks followed suit. 

Panchakanya Mai Hydropower Ltd, conversely, suffered the most and ended almost 6% lower. Radhi Bidyut Company Ltd and Barun Hydropower Co. Ltd, subsequently, registered declines of around 5% each. Ghalemdi Hydro Ltd, Narayani Development Bank Ltd and Kalika Power Company Ltd also came under pressure and dropped more than 4% each. Besides, other hydropower stocks dominated the list of major decliners. 

The equity market, as per the ARKS technical analysis, formed a bullish candlestick on the daily timeframe notching a fresh all-time high. With volumes supporting the recent advance, the equity market has more legs to the upside. Momentum indicators also suggest some more for upside movement before the market reaches overbought territory. Previous high of 2,827 acts as the immediate support. 

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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