Daily Market Commentary

Nepse logs 15-point gain

Published On: July 4, 2019 04:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 4: Stocks made modest movement in the initial trading hour of Wednesday's session. However, the Nepal Stock Exchange (Nepse) index saw strength after midday as a gradual advance followed. A final hour surge saw the index rally toward the 1,270-point mark. At the close, Nepse was down by 15.62 points at 1,268.68 points.

The benchmark index stretched its gains further closing in green for second straight row after it dropped to 1,240 points in the first trading day of the month. The broad rally in the day was also backed by relatively active market participation. The bourse witnessed total turnover of Rs 550 million on Wednesday, compared to Rs 429 million a day earlier.

All traded sectors mirrored the broader market with maximum gains coming from Microfinance and Non-Life Insurance scrips. Both the sub-indices were up by 1.83 percent. Life Insurance stocks followed suit as the group's sub-index rose by 1.57 percent. Similarly, Hydropower, Banking and 'Others' stocks witnessed considerable strength and ended over 1 percent higher. Subsequently, all other sub-indices registered moderate advances.

Shares of Nepal Bank Ltd continued to trade actively with turnover of over Rs 45 million. Century Commercial Bank Ltd and Mega Bank Ltd logged transactions of Rs 34 million and Rs 32 million, respectively. Meanwhile, Prabhu Bank Ltd and Civil Bank Ltd posted turnovers of over Rs 30 million each. Stocks of Shivam Cements Ltd, Janata Bank Nepal Ltd and Global IME Bank Ltd were also traded actively in the local bourse.

Microfinance stocks dominated the day's major advances as share price of Suryodaya Laghubitta Bittiya Sanstha Ltd rallied by over 8 percent followed by Swabhimaan Laghubitta Bittiya Sanstha Ltd and Ganapati Microfinance Bittiya Sanstha Ltd which saw their respective share prices shoot up by 6.76 percent and 5.99 percent. Shares of Prudential Insurance Company Ltd, Ridi Hydropower Development Company Ltd and First Micro Finance Development Bank Ltd also followed suit.In contrast, Reliance Finance Ltd was the major drag in the market. Its share price tanked 6 percent. Next on the list were Ngadi Group Power Ltd, Union Hydropower Ltd and Rairang Hydropower Development Company Ltd whose share prices slumped by over 4 percent each. Other energy stocks also struggled as Joshi Hydropower Development Company Ltd and Chhyangdi Hydropower Ltd both saw their respective share prices go down by 2 percent.

On announcement front, Neco Insurance Company Ltd has notified Nepse about its decision to distribute 12 percent bonus shares to its shareholders. The decision, however, is subject to the company's upcoming Annual General Meeting (AGM).

ARKS technical analysis shows a bullish candlestick formation on the daily timeframe, suggesting momentum shifting towards bulls in the current scenario. Following the day's gain, the index has held ground above the 1,250-point mark which indicates some strength visible in the bourse. Moving Average Convergence Divergence (MACD) is on the verge of forming a golden cross which will further substantiate the upward movement. Overall, the market is likely to continue its winning ways in the upcoming sessions.

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