KATHMANDU, Jan 6: The local stock exchange saw strength since the beginning of trading on Sunday. The Nepal Stock Exchange (Nepse) index climbed over 8 points in the initial trading hour and plateaued at midday. Another surge toward the close propelled the benchmark index 16.09 points higher to its three-month peak of 1,182.31 points.
Following some lackluster trading in the previous week, the index broke from its consolidation range as bulls dominated Sunday's trading. All major sectors followed the broad index and closed the day in green.
The day's rise was mainly driven by market participants opting to buy commercial banking scrips which are a good value for investors at current level. An increment in turnover also indicates that the market is gathering momentum.
Total turnover stood at Rs 712 million on the day. Hence, given the market holds ground with active market participation, the outlook remains fairly bullish for the coming sessions.
On the sectoral front, Microfinance sub-index posted the biggest gain with a jump of 2.4%. Market bellwether commercial banks also saw considerable strength as the group's sub-index went up by 1.62%. Subsequently, sub-indices of Life Insurance, Non-Life Insurance and Development Bank segments posted advances of over 1% each. Similarly, all other sectors ended the day higher.
Shares of Shivam Cements Ltd were heavily traded on the day. More than Rs 56 million worth of the cement manufacturer's shares changed hands on the day. NIC Asia Bank Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd followed suit with turnovers of Rs 43 million and Rs 42 million, respectively. Nepal Life Insurance Company Ltd, Himalayan Distillery Ltd and Citizen Investment Trust Ltd were among other active scrips of the day.
Two microfinance companies hit the upper circuit on the day. Share prices of Womi Microfinance Bittiya Sanstha Ltd and Grameen Bikas Laghubitta Bittiya Sanstha rallied 9.93% and 9.54%, respectively. Meanwhile, Shree Ram Sugar Mills Ltd, Saptakoshi Development Bank Ltd and Kanchan Development Bank Ltd added over 7% each on their respective share prices. Synergy Power Development Ltd, Support Microfinance Bittiya Sanstha Ltd and First Microfinance Development Bank Ltd also saw notable buying pressure as their share prices advanced by over 6% each.
In contrast, Nepal Finance Ltd and Corporate Development Bank Ltd saw their share prices tumble by more than 5% each. Next, share value of Panchakanya Mai Hydropower Ltd declined by 3.44%. Other major losers for the day include Siddhartha Equity Fund, Nepal Investment Bank Ltd Promoter Share and Khanikhola Hydropower Co Ltd which gave up over 2% apiece.
ARKS technical analysis indicates that the market formed a bullish candlestick on the daily timeframe. With the day's gain, the index broke out from its current consolidation range with possibility of further northbound movement. Technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest that the secondary market will further add to December's rally. Nonetheless, the positive outlook will be validated only if the index manages to stay above 1,180 points with notable volumes in the coming sessions.
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)