Daily market commentary

Nepse near 1,200 points as market extends rally

Published On: September 5, 2019 02:25 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index dropped more than 7 points in the morning session, but staged a recovery after mid-day trimming all its initial losses. Stocks held ground in the afternoon and saw a slight advance toward the close. The benchmark index eventually closed the day 3.87 points higher at 1,194.77 points on Wednesday.

Overall, the sentiment remained positive after the bourse rallied by more than 20 points on Tuesday snapping a four-day losing run. Despite some indecision witnessed in the session, the market favored the bulls pushing the index in green for second straight day. However, many investors are still taking a cautious approach as reflected by a slight drop in turnover compared to the previous trading day. Stocks worth Rs 436 million were traded on the day.

Majority of sectors mirrored the major average. Losses came only from Manufacturing & Processing, Finance and 'Others' segments which were down by 0.78%, 0.62% and 0.32%, respectively. Mutual Fund units led the day's advances with the group's sub-index going up by 1%. The heavyweight Banking sub-index also rose by 0.56 % followed by Non-life Insurance sub-index which was up by 0.55 %. The Hydropower sub-index also ended the day 0.43% higher. All other sub-indices eked out marginal gains.

Shares of Machhapuchhre Bank Ltd were heavily actively in the market with turnover of over Rs 93 million. Nepal Bank Ltd and Citizen Investment Trust, subsequently, posted turnovers of around Rs 20 million each. Citizen Investment Trust is closing its shareholders book from Thursday for the purpose of distributing 22% bonus shares to its shareholders. Prabhu Bank Ltd, Sanima Bank Ltd and Nepal Life Insurance Company Ltd were among other active stocks in the secondary market, registering turnovers of Rs 16 million, Rs 15 million and Rs 14 million, respectively.

Panchthar Power Company Ltd was the bigger gainer of the day as its share price rallied by over 9%. Next on the list were Ridi Hydropower Development Company Ltd and Karnali Development Bank Ltd which saw their share prices jump by almost 5% each. Meanwhile, National Microfinance Bittiya Sanstha Ltd and Gurans Laghubitta Bittiya Sanstha Ltd posted gains of over 4 % each.

In contrast, Hydroelectricity Investment and Development Company Ltd suffered the most as its share price fell by 3.42 %. Shrijana Finance Ltd, United Finance Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd followed suit as their unit prices were down by over 3%. Kamana Sewa Bikas Bank Ltd, Butwal Power Company Ltd and Nepal Insurance Co Ltd were among other major losers on the day.

In corporate space, Nepse listed Initial Public Offering (IPO) shares of Ghodighoda Laghubitta Bittiya Sanstha Ltd for trading and set trading range at Rs 77.01 to Rs 231.03 per share. The microfinance will likely open trading on Thursday.

ARKS technical analysis indicates the market forming a spinning top candlestick indicating some indecision in the market. Nonetheless, the index rose further stretching gains to a second straight day. Technical indicators also suggest the market gaining momentum at the current juncture. An immediate resistance lies at 1,200 points level, the breach of which might see the benchmark index stretch its upward movement in the short run.

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