Daily market commentary

Nepse rallies with a surge in daily turnover

Published On: November 12, 2019 11:23 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks largely traded in green throughout Monday's trading session. The Nepal Stock Exchange (Nepse) index rose initially and wavered slightly higher in the first half of Monday's trading. A broad rally, thereafter, pushed the index higher by over 13.77 points or 1.22% to close at 1,145.57 points.

The relatively notable rally on Monday also helped the index erase its losses that came in past four sessions. Bulls dominated the day's trading activity, buying in every small dips in the session. However, the market is still trending within its consolidation zone. Further gains in the subsequent trading days backed by noteworthy activity can give more leg to the surge that might eventually help the market stage a recovery. Turnover jumped to Rs 550 million from Rs 293 million on Sunday.

Most of the sectors closed the day in positive territory following the market, except 'Others' sector which ended marginally lower. Manufacturing & Processing and Microfinance sub-indices saw some of the best performances of the day with gains of 2.32% and 2.07%, respectively. Hotels, Non-Life Insurance, Life Insurance, Hydropower and Banking sub-indices climbed above 1% each. All other sub-indices closed in the green.

Shares of NMB Bank Ltd led the list of top turnover stocks of the day. The bank proposed 35% dividend including 21% bonus shares and 14% cash dividend, highest total dividend among its counterparts for the year 2018/19 so far. Its stock registered a total turnover of over Rs 139 million. Likewise, Prabhu Bank Ltd, Machhapuchhre Bank Ltd, Prabhu Bank Ltd Promoter Share and Prime Commercial Bank Ltd Promoter Shares recorded total transactions of Rs 73 million, 35 million, 32 million and 21 million, correspondingly. Nepal Bank Ltd, Nabil Bank Ltd, Chilime Hydropower Company Ltd and Nepal Credit & Commerce Bank Ltd were among other actively traded scrips.

In terms of gainers, shares of Himalayan Distillery Ltd witnessed the best performance as its share price hit upper circuit of 10%. The beverage manufacturer proposed 50% bonus shares and 52.63% cash dividend to its shareholders on Monday. Similarly, Sabaiko Laghubitta Bittiya Sanstha Ltd, Ridi Hydropower Development Company Ltd, Ankhu Khola Jalabidhyut Company Ltd and Radhi Bidhyut Company Ltd rose over 9% apiece. Other top advances include NMB Bank Ltd, Arun Valley Hydropower Company Ltd. and Universal Power Company Ltd.

On the other hand, NIBL Samriddhi Fund 1 and Khani Khola Hydropower Company Ltd fell 5.77% and 3.57% respectively. City Express Finance Co. Ltd, Himalayan Urja Bikas Company Ltd, Mega Bank Ltd Promoter Share and NIC Asia Growth Fund also suffered with declines of over 1% each.

Among announcements, Ganapati Microfinance Bittiya Sanstha Ltd declared 7% stock dividend to its shareholders. Meanwhile, shareholders of Guheswori Merchant Banking and Finance Ltd are entitled to 6.5% cash dividend. Both dividends are yet to be approved in the respective Annual General Meetings (AGMs). On the earnings front, Prabhu Bank Ltd reported Rs 628 million in net profit – up 5% against corresponding quarter previous year.

ARKS technical analysis indicates the market forming a bullish candlestick on the daily timeframe suggesting buyers dominating the market on Monday. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) reflect market gathering slight strength. Nonetheless, the equity index still remains bounded by 1,150 point's resistance. Its breach in the coming session with significant turnover can suggest possibility of further upward movement in the bourse.

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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