Daily market commentary

Nepse slightly up as sectors end mixed

Published On: February 6, 2020 10:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks witnessed a choppy session on Wednesday as the Nepal Stock Exchange (Nepse) index traded within a confined range on Wednesday. The major average opened on a positive note and climbed above 1,340 points in the morning. The index fell in red for a couple of times at midday, but an advance toward the close saw the index end 5.31 points higher at 1,342.36 points.

Following a 12-point loss on Tuesday, investors seemed to buy the dips albeit in smaller positions. However, the index only posted a modest gain as the day's sentiment remained fairly neutral. With some investors fearing a major correction and others expecting a sustained rally, the index will likely consolidate in the current range. Turnover in the bourse also dropped but was still above Rs 1 billion.

Sectoral performance indicates slightly positive bias with Trading sub-index registering a gain of 3.61% followed by Hotels sub-index which rose 2.7% and 'Others' segment which ended 1.64% higher. Finance, Life Insurance, Non-Life Insurance, Banking and Microfinance segments also ended the day in green. Conversely, Mutual Fund segment sank 1.31%. Hydropower, Manufacturing & Processing and Development Bank sectors saw a marginal decline.

Civil Bank Ltd led the list of active scrips as over Rs 161 million worth of the commercial bank's shares changed hands on the day. Secondly, Citizen Investment Trust saw total transactions worth Rs 62 million. Subsequently, insurance stocks were traded actively in the local bourse. Gurans Life Insurance Company Ltd and Nepal Insurance Company Ltd logged turnovers of Rs 59 million and Rs 41 million, respectively. Surya Life Insurance Company Ltd, Nepal Life Insurance Company Ltd and Neco Insurance Company Ltd were next in the list. 

Among gainers, Support Microfinance Bittiya Sanstha Ltd hit the upper circuit of 10%. Similarly, share prices of Civil Bank Ltd rallied almost 9%. Citizen Investment Trust saw its share price go up by 7.08%, while Karnali Development Bank Ltd's share price shot up by 6.25%. Share prices of Reliance Finance Ltd, Salt Trading Corporation Ltd and Gurans Life Insurance Company Ltd ended the day 4% higher each.

Hydropower stocks suffered the most. National Hydropower Power Company Ltd and Nepal Hydro Developers Ltd saw their share prices fall by over 6% each. Sanima Mai Hydropower Ltd and Dibyashwori Hydropower Ltd also struggled as both saw their respective share prices sink by over 5%. Share prices of Saptakoshi Development Bank Ltd, Himal Power Partner Ltd and Rasuwagadhi Hydropower Ltd also slumped at least 3% each.

In corporate space, Himalayan General Insurance Ltd has revised its dividend declaration. Earlier the insurer had announced 5% stock dividend and 5.5% cash dividend to its shareholders. However, it has now announced to distribute 4% stock dividend and 3.75% cash dividend.

On technical front, the index formed a small bullish candlestick preventing the extension of previous day's losses. In the meantime, technical indicators suggest neutral sentiment. The outlook remains fairly bullish as long as the index holds its footing above 1,280-point level. Further, a breach of the previous high at around 1,350 points is crucial for the market to continue its bullish run.

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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