Daily Market Commentary

Nepse rebounds after four-day losses

Published On: March 26, 2019 09:54 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: In the initial trading hour of Monday's session, stocks lacked conviction and traded slightly in the red. The Nepal Stock Exchange (Nepse) index gained some momentum in the afternoon and erased its earlier losses to trend over 5 points higher at mid-session. Despite a pullback, Nepse managed to close 3.87 points higher at 1,138.67 points.

Investors found some respite as the local equity market snapped its four-day losing streak clawing back some of its earlier losses. In the current scenario, absence of any major events or news in the financial front has been contributing to the relatively lackluster sessions of late. 

Turnover remained on the lower side of the spectrum as only Rs 242 million worth of equities changed hands on Monday. 

Sub-indices continued to show modest moves and ended mixed in the session. Insurance stocks led advances as Life Insurance and Non-Life Insurance sub-indices climbed 0.87 percent and 0.8 percent, respectively. Similarly, Development Bank, Hotels and Banking sub-indices also eked out marginal gains on the day. In contrast, sub-index of Manufacturing & Processing segment sank 1.18 percent followed by that of 'Others', Finance and Hydropower scrips which edged slightly lower. 

Promoter shares of Muktinath Bikas Bank Ltd were traded the most with a total turnover of over Rs 20 million. Next, Citizen Investment Trust witnessed a total transaction of over Rs 11 million. Further, Nepal Credit and Commercial Bank Ltd, Upper Tamakoshi Hydropower Ltd and Nepal Life Insurance Company Ltd registered turnovers of over Rs 8 million apiece. 

Maximum gains came from Global IME Laghubitta Bittiya Sanstha Ltd. Its share price shot up by almost 6 percent. Energy sector stocks followed suit as Nepal Hydro Developers Ltd and Ridi Hydropower Development Company Ltd registered gains of over 3 percent each. Arambha Microfinance Bittiya Sanstha Ltd, Sagarmatha Insurance Company Ltd and Synergy Power Development Company Ltd were among other top gaining scrips. 

Conversely, shares of Universal Power Company Ltd and Shivam Cements Ltd hit lower circuit of 10 percent for second straight day. Janautthan Samudayic Laghubitta Bikas Bank also tanked 5.92 percent. The microfinance is in due process of issuing 100 percent right shares to its shareholders. 

The issuance, however, is yet to be approved by Securities Board of Nepal (Sebon). Other losing securities include Global IME Sammunat Scheme-1, Shree Investment Finance Co. Ltd and Radhi Bidyut Company Ltd.

As per the ARKS technical analysis, the market formed a small bearish candlestick indicating a slight recovery following four day losses. Meanwhile, Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest a neutral sentiment after Monday's advance. However, the market is yet to recover from its long term downtrend. A surge above 1,160 points in the short run can suggest a possible move towards 1,200 points.

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)

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