Daily Market Commentary

Nepse posts modest gains after initial slump

Published On: December 7, 2018 07:36 AM NPT

KATHMANDU, Dec 7: The Nepal Stock Exchange (Nepse) index started the session on a weak note, losing almost 10 points in the initial trading hour on Thursday. However, stocks surged after midday with the Nepse index erasing all its initial losses to trade almost 7 points higher. The index pulled back slightly toward the close, gaining 2.70 points to end the week at 1,120.84 points. 

With the day’s gain, the benchmark index recouped some of its previous day’s losses. However, the index is still closing near 52-week low recorded on Wednesday, suggesting that feeble investor sentiment is prevailing in the market. Market activity remained subdued as the bourse posted a total transaction of Rs 371 million in the session. 

Most of the sectoral indices ended the day in green. Hydropower, and Manufacturing & Processing sub-indices shed 0.85 percent and 0.12 percent, respectively. Life Insurance stocks sub-index surged by 0.89 percent. Similarly, Non-Life Insurance sub-index also recovered 0.72 percent. Banking and financial sector stocks also edged higher with Banking, Development Bank and Finance sub-indices posting gains of 0.26 percent, 0.24 percent and 0.13 percent, respectively. 

Commercial bank scrips were high demand among investors. Shares of NMB Bank Ltd led the listed companies in terms of transaction amount. The commercial bank’s shares worth Rs 44 million were traded on the day. Second on the list was, Nepal Bank Ltd with total transactions of Rs 33 million, followed by Global IME Bank Ltd which logged total transactions of Rs 17 million. Machhapuchhre Bank Ltd Promoter Share and Prabhu Bank Ltd were the other active scrips of the day with turnover of over Rs 16 million each.

IME General Insurance Ltd was the day’s top gaining stock as its price surged by almost 7.30 percent. Share price of Api Power Company Ltd advanced by 5.67 percent. Surya Life Insurance Company Ltd and Pokhara Finance Ltd also saw their share prices surge by over 4 percent each. Gurans Life Insurance Company Ltd, Vijaya Laghubitta Bittiya Sanstha Ltd and Prime Life Insurance Company Ltd were among other advances, posting gains of over 3 percent each.

Microfinance stocks led the list of losers with biggest losses coming from Kalika Laghubitta Bittiya Sanstha Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd. Share price of the former tanked 7.43 percent following announcement of 8 percent bonus shares to its shareholders, while the latter posted a decline of 5.69 percent. Similarly, share price of United Modi Hydropower Ltd and Kabeli Bikas Bank Ltd closed over 4 percent lower. Other major losers of the day include Rairang Hydropower Development Company Ltd, Arambha Microfinance Bittiya Sanstha Ltd and Radhi Bidyut Company Ltd.

As per the ARKS technical analysis, the index formed a small bullish candlestick following the day’s advance. However, with Relative Strength Index (RSI) still trending in the oversold zone and Moving Average Convergence Divergence (MACD) further tilting downward in the negative territory, the overall sentiment remains fairly bearish at the moment. Hence, the market is not yet favorable for significant long positions.

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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