KATHMANDU, May 29: Nepal Stock Exchange (Nepse) index surged 2.77 percent to close at 1,336.39 points on Monday.

The benchmark index recovered almost all of its losses from last week as investors' sentiment turned positive with the budget announcement due on Tuesday afternoon.

Subsequently, turnover increased to over Rs 479 million – a rise of 20.69 percent compared to a day earlier. Following the movement of the broader market, all major sub-indices ended in green. Reflecting the strength in the hotels sector, the Hotels Sub-index surged 5.25 percent. Insurance Sub-index also gained over 4 percent followed by Microfinance Sub-index which rose by over 3 percent.

Among the active stocks, Citizens Bank International Ltd (Promoters' Shares) recorded the highest turnover of Rs 50 million. Next, Global IME Bank Ltd (Promoters' Shares) logged turnover of Rs 22 million. Next in the list were Nepal Bank Ltd, Global IME Bank Ltd and Nepal Investment Bank Ltd.

Primarily, shares of microfinance and insurance companies dominated the top gainers' list, led by Shikhar Insurance which saw its share price go up by 9.65 percent. Similarly, Janautthan Samudayik Laghubitta Bittiya Sanstha Ltd and Kisan Microfinance Bittiya Sanstha Ltd closed over 9 percent higher. In contrast, shares of Mega Bank Ltd declined the most as it lost almost 10 percent on its price. Shares of Mega Bank Ltd resumed trading on Monday after its merger with Tourism Development Bank. Share trading of the commercial bank was halted for 16 months because of the merger. Pokhara Finance Ltd (Promoter's Shares) followed suit, recording 8 percent drop in its share price.

In terms of earnings, Lalitpur Finance Ltd reported a net profit of Rs 81 million for the third quarter -- a decline of 27.88 percent year-on-year. Besides, Jebils Finance Ltd announced its book closure on June 6 for 40 percent rights issue. After the issue, the paid-up capital of the finance company will reach Rs 800 million as required by the Nepal Rastra Bank. Pokhara Finance has also confirmed its annual general meeting (AGM) on June 19. Distribution of 8.26 percent bonus shares is one of agendas of the AGM.

ARKS technical analysis model indicates a large bullish candlestick formation on daily timeframe as the index has bounced back from the psychological support level of 1,300 points. The index just touched the 20 day exponential moving average (EMA) line, the cross of which might indicate further upward movement. Relative Strength Index (RSI) also bounced back to mid-zone as the supply pressure has subdued. Moving Average Convergence/ Divergence (MACD) line, however, remains near the neutral line, suggesting no significant trend is visible. Overall, the benchmark index can be expected to enter uptrend if the market continues this momentum supported by significant turnover in the coming days.

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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