Weekly Market Commentary

Nepse near 2,300 points after upbeat trading week

Published On: January 15, 2021 06:56 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 15: Second trading week of January registered an uplifting start with the benchmark Nepal Stock Exchange (Nepse) index rising more than 41 points on Sunday. The buying momentum eased slightly on Monday with the market closing with a modest 3 point’s gain. Nonetheless, the equity market saw further strength on Tuesday’s and Wednesday’s session as the benchmark added 28 points and 18 points, respectively. The market remained closed on Thursday due to public holiday. Overall, the index’s weekly gain tally stood at 92.06 points or 4.2%. Nepse finished the week at 2,286.55.

The equity market extended its upward movement with a fifth straight week of gain. Despite quarter end selling pressure, the local bourse firmly held footing above 2,200 mark. Hence, the overall sentiment has continued to remain upbeat. Market participation in the week also remained over par with daily average turnover of over Rs. 5.6 billion.

Sensitive Index also ended the week 3.33% higher reflecting advance in Class ‘A’ stocks. Finance and Development Bank segments were this week’s leading sectors. The corresponding sub-indices rose 11.09% and 7.53%. Hydropower and Non-Life Insurance segments followed suit with rallies of around 6% each. All other sectors registered notable gains in the week-on-review. Bellwether banks also ended 4.45% higher. ‘Others’ segment ended essentially flat.

This week over 18 million unit bonus shares of NIC Asia Bank Ltd were listed in the exchange. The bank’s Annual General Meeting (AGM) endorsed a 20% dividend for the year 19/20 including 19% bonus shares and 1 % cash dividend for tax purposes.

On the technical front, the equity market formed a bullish candlestick on the daily timeframe with index resting just shy of 2,300 mark. Hence, some resistance can be found at the respective psychological level. Both weekly Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest that the momentum favors bulls in the present context. With back-to-back weeks of advances, some correction on profit booking can be expected in the coming week. However, given the stock market maintains its ground above 2,100 mark, the uptrend will likely extend into the coming months.

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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