Daily market commentary

Nepse rises amid anticipation of monetary policy

Published On: July 25, 2019 05:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 25: Stocks lacked conviction for most of Wednesday's session as the benchmark Nepal Stock Exchange (Nepse) index wavered along its opening level till midday.

However, the market witnessed considerable strength toward the closing hours as the index climbed 6.9 points higher to close the day at 1,284.07 points.Following the day's advance, the index has closed in green for three straight sessions as investors remained upbeat ahead of the monetary policy announcement. Meanwhile, majority of market participants also resorted to cautious trading.

Despite some improvement in the market activity, the bourse witnessed a below average turnover of Rs 443 million on the day.Barring Finance and Manufacturing & Processing sub-indices, all other sectoral indices closed the day higher. Hotels stocks led the day's rally as its sub-index surged by 1.95%.

Similarly, Non-Life Insurance and Microfinance sub-indices posted gains of over 1% each. Mutual Fund sub-index climbed up by 0.88%, while heavyweight banking sub-index closed the day 0.54% higher. All other sectors eked out marginal gains.Nepal Bank Ltd continued to lead the list of active scrips. Over Rs 39 million worth of the commercial bank's shares changed hands on Wednesday. Agricultural Development Bank Ltd and Prabhu Bank Ltd followed suit with turnovers of over Rs 26 million each. Nepal Life Insurance Co Ltd, NIC Asia Bank Ltd and Nabil Bank Ltd saw Rs 25 million, Rs 15 million and Rs 14 million worth of shares traded, respectively. Among advances, Ganapati Microfinance Bittiya Sanstha Ltd turned in the best performance of the day as its share price rallied by over 9%. Share price of Mithila Laghubitta Bittiya Sanstha Ltd also surged by 8.50% gain.

Further, Dibyashwori Hydropower Ltd and Samudayik Laghubitta Bittiya Sanstha Ltd saw their respective saw prices go up by over 7% each. Other microfinance stocks followed suit. In contrast, Union Hydropower Ltd suffered the most as the hydropower company's share price tanked

5%. Similarly, City Express Finance Co Ltd, Progressive Finance Ltd and Janautthan Samudayik Laghubitta Bikas Bank saw their respective share prices go down by over 3% each. Best Finance Company Ltd, United Insurance Co Ltd and Shree Investment Finance Co Ltd were among other losing securities of the day.

On announcement front, Shikhar Insurance Company Ltd is holding its Annual General Meeting (AGM) for Fiscal Year 2017/18 on August 13. Proposal to distribute 30% right shares is one of the agendas of the meeting. Similarly, Lumbini General Insurance Company Ltd is convening its AGM on August 14. No agenda for dividend distribution has been published in the company's notice sent to Nepse.ARKS technical analysis indicates the market forming three bullish candlesticks in a row on a daily timeframe. Technical indicators like Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) are also tilted upward, indicating the market gathering momentum. After the breach of 1,270-point mark, the index is now likely to head toward its immediate resistance of 1,300 points.

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