Daily market commentary

Nepse surges as insurance, banking stocks post gains

Published On: January 31, 2020 09:16 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index maintained positive bias for most of the session on Thursday. A steady advance with alight dips saw the benchmark index add 19.51 points, or 1.49%, to close the day at 1,325.38 points on the last trading day of the week.

After a brief consolidation at around 1,300-point mark, the index surged by almost 20 points amidst Thursday’s broad rally. While insurance stocks continued their strength, banking scrips made a rebound from a short-term correction. Overall, the sentiment still remains clearly bullish with the possibility of market resisting at around 1,340 points. Meanwhile, reinvestment of gains and entry of new participants has seen the market post a series of remarkably active sessions. Total turnover was recorded at around Rs 2 billion on the day.

Non-life Insurance and Life Insurance sub-indices were the best performers of the day as their sub-indices jumped up by almost 4% and 2.28%, respectively. Banking sub-index was also up by 1.61%, pushing the market capitalization-based index firmly higher. Hotels, Hydropower, Finance and Development Bank sectors also closed 1% higher each. All other sectors barring Trading, which was down by 1.91%, closed the day in green.

Life Insurance stocks were traded heavily in the local bourse led by Surya Life Insurance Company Ltd and Prime Life Insurance Company Ltd which posted turnovers of Rs 113 million and Rs 72 million, respectively. Nepal Life Insurance Company Ltd, Asian Life Insurance Company Ltd and National Life Insurance Company Ltd witnessed turnovers of at least Rs 66 million each. Prabhu Bank Ltd, Gurans Life Insurance Company Ltd and Nadep Laghubitta Bikas Bank Ltd were among other active scrips of the day.

Everest Insurance Company Ltd and Surya Life Insurance Company Ltd remained locked in the upper circuit after adding around 10% each on their share prices. United Finance Ltd and Himalayan General Insurance Company Ltd also saw their respective share prices surge by over 8% each. Share prices of United Insurance Comp, Gurans Life Insurance Company Ltd, Asian Life Insurance Company Ltd and Vijay Laghubitta Bittiya Sanstha Ltd were up by over 7% each.

On the other hand, share price of Himalayan Urja Bikas Company Ltd tumbled 5.35%, while Nadep Laghubitta Bittiya Sanstha saw its share price fall by 4.98%. Similarly, share prices of Gurkhas Finance Ltd, Karnali Development Bank Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd were down by 4.68%, 3.60% and 3.26%, respectively. Other major decliners include Reliance Finance Ltd, United Modi Hydropower Ltd, Salt Trading Corporation and RMDC Laghubitta Bittiya Sanstha Ltd.

In corporate space, Everest Bank Ltd reported has reported a 5.59% growth in its net profit to Rs 1.5 billion year-on-year. Sunrise Bank Ltd has posted a 19% growth in its profit to Rs 944 million, according to the earnings report of the bank for the second quarter of FY2019/20.

ARKS technical analysis indicates the market forming a bullish candlestick indicating that buyers were in control in Thursday’s session. Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators confirm bulls gaining control of the market. Hence, the likelihood of the market stretching gains in the coming sessions is high. Some caution should be taken at around 1,340-1,350 points level as its breach will fuel further rally, while a reversal from the zone might suggest another correction.


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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