KATHMANDU: The Nepali stock market lacked conviction in the first half of Sunday's trading as the benchmark Nepal Stock Exchange (Nepse) index remained unchanged. Nonetheless, the stocks witnessed a broad rally later in the afternoon as the index climbed gained 8.59 points to close at 1,190.28 points.
The bourse experienced significant strength in the first day of the week. The rally came on the back of investors showing major interest in the relatively cheap banking and financial institution stocks. The day saw increased market participation as daily turnover improved by more than 40 percent to Rs 302 million.
On the sectoral front, sub-indices posted mixed performance on the day. Hotels stock turned in some of the best performances of the day as its sub-index rose 1.77 percent. It was followed by heavyweight Banking and Development Bank scrips. The groups' sub-indices rose 1.09 percent and 0.95 percent, respectively. Sub-indices of Microfinance, Non-life Insurance, Hydropower and Finance stocks also closed higher on the day. On the other hand, 'Others', Manufacturing & Processing, and Life Insurance sub-index also ended the day in red.
NIC Asia Bank Ltd was the most actively traded stock on the day. Over Rs 32 million worth of its shares were exchanged. It was followed by shares of Nepal Life Insurance Company Ltd with turnover of Rs 29 million. The stock has persisted to trade actively since the company decided to convert 10 percent of its promoter share to public category last month. Post-conversion, its promoter shareholding will stand at 60 percent. Further, NMB Bank Ltd registered a turnover of over Rs 20 million. Other commercial bank stocks including Nepal Bank Ltd, Janata Bank Nepal Ltd and Sunrise Bank Ltd were also actively traded on the day.
NIC Asia Bank Ltd's scrip, which posted gains in the previous three sessions, added to its gains on Sunday. Its share price surged 5.59 percent. Development bank stocks followed suit, as share prices of Tinau Development Bank Ltd, Bhargav Bikas Bank Ltd and Gandaki Development Bank Ltd increased by 5.45 percent, 5 percent and 4.21 percent, respectively.
On the losing side, stocks of Suryodaya Laghubitta Bittiya Sanstha Ltd declined the most and skidded 3.31 percent. Similarly, share price of Arambha Microfinance Bittiya Sanstha Ltd lost 2.43 percent, and Kalika Microcredit Development Bank Ltd fell 2.05 percent. Further, Rairang Hydropower Development Company Ltd and Siddhartha Equity Oriented Scheme saw their unit prices drop by over 2 percent each.
On news front, Nepal Stock Exchange has listed over 17 million units of shares for trading on Sunday. The listing includes recently issued 463,826 units of Further Public Offering (FPO) shares of Citizens Bank International Ltd. Besides, bonus shares of United Finance Ltd and Manjushree Finance Ltd, and right shares of Kumari Bank Ltd and Surya Life Insurance Company Ltd were also listed for trading on the day.
ARKS technical analysis model indicates the index trying to recover after bouncing back from 1,170-point level last week. Nonetheless, the index is still trading within the consolidation zone with no significant sign of reversal from its prolonged downtrend. A short bull run can be expected if the index manages to breach the resistance levels at 1,200 points and 1,225 points.
This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)