Weekly Market Commentary

Nepse posts 50-point weekly gain

Published On: February 5, 2021 07:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 5: The local benchmark came under notable pressure in the beginning of the week with the Nepal Stock Exchange (Nepse) shedding more than 54 points on Sunday. Nonetheless, the bourse saw a massive rebound in the subsequent sessions. The index rallied 37 points and 65 points on Monday and Tuesday. Movement remained relatively subdued in the latter half of the week. The index fell more than 6 points on Wednesday, while Thursday witnessed an 8-point advance. Eventually, Nepse ended the week with a 49.97-point or 2.06% advance at 2,475.27.

The index has shown little sign of slowing down as the market continues to extend its 2021’s gains. Participation in the secondary market has also remained in around its highest level with more investors pouring money into the equity market amidst lack of decent returns on alternatives, mainly bank deposits. Hence, demand for equities from both institutional and retail investors have helped the market remain afloat, despite a sharp rally of over 1,000 points in post-lockdown trading. Weekly turnover stood at over Rs. 41 billion.

Sensitive Index rose 2.71%, as Class ‘A’ stocks outperformed the broader market. All sectors saw upbeat movement in the week, barring Finance segment which lost 3.46% after a sustained rally in January. ‘Others’ sector was the week’s leader as the group’s sub-index rose 4.81%. Hydropower and Trading indices also followed with gains of over 4% each. Non-Life Insurance and Microfinance stocks rose over 3% on average. Al other segments closed the review period in green. Heavyweight banks advanced 0.51%.

Shares of Nepal Reinsurance Company Ltd were traded the most with weekly turnover of over Rs. 2 billion. Global IME Bank Ltd also saw massive transaction as its price rallied over 17% in the week on review. Over Rs. 1.5 billion worth of the banking giant’s share hanged hands. Next, Nepal Life Insurance Company Ltd and Nepal Telecom Ltd posted turnovers of over Rs 1.3 billion apiece. Shikhar Insurance Company Ltd, National Life Insurance Company Ltd and NIC Asia Bank Ltd were among other actively traded shares.

In the week, the exchange listed bonus shares of Nepal Credit and Commerce Bank Ltd, Sanima Bank Ltd and Chilime Hydropower Company Ltd. Similarly, right shares of Nepal Finance Ltd and Samriddhi Finance Ltd were also listed.

The benchmark, as per the ARKS technical analysis, formed a strong bullish candlestick on the weekly timeframe. With the index posting back-to-back weekly gains, momentum favors the bulls in the present contest. Besides, technical indicators also reflect a decent growth in the equity market which might extend in the month of February. Meanwhile, a correction can see the index test 2,400 support level.

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 thispublication)

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