Daily market commentary

Nepse rebounds with 20-point rally

Published On: September 4, 2019 08:10 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Nepal Stock Exchange (Nepse) index posted a gain of 201.57 points to settle at 1,190.90 points on Sunday even though weakness of the previous over carried over to initial trading hour on Tuesday. The benchmark index fell to an intra-day low of 1,156.68 points before stating a significant rally toward the close.

With the day's advance, the index snapped its four-day losing run and posted the biggest daily gain since early May. Since both sellers and buyers were active, the bourse witnessed a highly volatile session with sellers finally losing steam at the session's end. The surge in the index was also accompanied by active market participation as stocks worth Rs 500 million on the day – the highest since August 1.

CDS and Clearing Limited introduced a new feature on Meroshare portal on Monday which eliminates the requirement for investors to present weighted cost details on paper to broker offices after selling securities. Instead, on the beta website, the weighted cost calculation has been amalgamated in the system itself providing investors a more convenient method of weighted cost calculation. While some are still skeptical about the effectiveness of the system, many have welcomed the much-required update.

All major sectors closed the day in green with Insurance sub-index leading the advances. Both Life Insurance and Non-life Insurance sub-indices were up by at least 2.75% each. Microfinance and Hydropower sub-indices, similarly, surged by over 2% each. Market heavyweight Banking sub-index also advanced by 1.78% elevating the capitalization-based market index higher. All other sub-indices, except 'Others' and Mutual Fund, ended the day in green.

In terms of market participation, Nepal Bangladesh Bank Ltd Promoter Share witnessed the highest turnover of Rs 57 million. Nepal Bank Ltd and Nepal Life Insurance Company Ltd followed suit with Rs 33 million and Rs 22 million worth of shares traded, respectively. Meanwhile, NIC Asia Bank Ltd posted turnover of Rs 22 million. Shares of Sanima Bank Ltd were also traded actively in the bourse after the commercial bank announced 21.05% dividend to its shareholders. The dividend includes 11.05% cash payout and 10% bonus shares.

Shares of Universal Power Company Ltd led the day's rally as its share price shot up by almost 10%. Share prices of Surya Life Insurance Company Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd also rallied by over 8% each. Asian Life Insurance Company Ltd, Adhikhola Laghubitta Bittiya Sanstha Ltd, Lumbini General Insurance Co Ltd and Siddhartha Insurance Ltd posted gains of at least 6% each. 

On the other hand, share price of City Express Finance Co Ltd fell by 5%. Share price of Ridi Hydropower Development Company Ltd was also down by over 3%. Ghalemdi Hydro Ltd, Green Development Bank Ltd and Global IME Sammunat Scheme-1 were among other losing 

The market, as per ARKS technical analysis, formed a bullish candlestick on the daily timeframe erasing all its losses of the previous day. Relative Strength Index (RSI) has bounced back from the oversold territory, suggesting a possible shift in momentum. The rally above 1,200 points with improved volume in the coming sessions will substantiate the rebound further which can provide opportunity for traders to take long positions in the market.

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