Daily market commentary

Nepse starts new fiscal year on a positive note

Published On: July 18, 2019 07:48 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks traded in green from the beginning of Wednesday's trading session. The benchmark Nepal Stock Exchange (Nepse) index climbed to as high as 1,270 points by midday. Though it pulled back slightly later on, a rise toward the close saw the index climb further to end the day's trading 15.85 points higher at 1,274.86 points.

Considerable strength was visible in the bourse leading to the day's broad rally. Sustained buying pressure was witnessed in almost all traded sectors throughout the day. The beginning of the fiscal year 2019/20 also marks the start of the earnings season. Listed companies will begin publishing their financials within short order which is likely to set a more definitive tone for the overall market. Nonetheless, the market registered moderate turnover of Rs 427 million.

Barring Hotels and Finance sectors, all other traded sectors closed the day in green. Microfinance and Development Bank stocks led the rally with gains of 1.81% and 1.69%, respectively. Hydropower, Banking, Manufacturing & Processing and Non-life Insurance also posted firm gains with their respective sub-indices adding over 1% each. Besides, all other sectors closed slightly higher.

In terms of trading activity, Nepal Bank Ltd logged maximum turnover of over Rs 47 million. Similarly, shares of Nepal Life Insurance Company Ltd, Shivam Cements Ltd and Upper Tamakoshi Hydropower Ltd were also traded actively with turnover of Rs 29 million, Rs 24 million and Rs 21 million, respectively.

Nepal Investment Bank Ltd Promoter Share, Nabil Bank Ltd and Lumbini Bikas Bank Ltd were the other active stocks of the day.

Among gainers, microfinance scrips were among the day's best performers. Share price of Unnati Microfinance Bittiya Sanstha Ltd surged by 7%, while Summit Laghubitta Bittiya Sanstha Ltd, Global IME Laghubitta Bittiya Sanstha Ltd and Swadeshi Laghubitta Bittiya Sanstha Ltd saw their respective share prices go up by over 6%. Share prices of Swarojgar Laghu Bitta Bikas Bank Ltd, Lumbini Bikas Bank Ltd and Mero Microfinance Bittiya Sanstha also appreciated.

On the other hand, Civil Laghubitta Bittiya Sanstha Ltd came under significant pressure as reflected by a 9% drop in its share price. Dibyashwori Hydropower Ltd closely followed with a decline of 8.97%. Further, share prices of Arun Kabeli Power Ltd and United Finance Ltd tumbled by over 5% each. Reliance Finance Ltd, Siddhartha Equity Fund and Soaltee Hotel Ltd were among other top losers.

In corporate space, Sabaiko Laghubitta Bittiya Sanstha Ltd began floating its Initial Public Offering (IPO) on Wednesday. Out of the total issue of 530,000 units, 495,250 units have been separated for general public while remaining shares have been allocated for its employees and mutual funds. The issue will close on July 21.

ARKS technical analysis indicates the market forming a bullish marubozu candlestick on the daily timeframe which reflects sustained buying pressure in the bourse. With the day's gain, the index has also climbed above its immediate resistance at 1,270 points. Hence, a close above this level in the next session will substantiate the possibility of a further upward movement in the short 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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