Daily market commentary

Nepse surges breaking 4-day losing streak

Published On: July 3, 2019 04:30 AM NPT By: Republica

KATHMANDU, July 3: Local stocks continued to witness slow trading till Tuesday afternoon. The Nepal Stock Exchange (Nepse) index wavered along the opening level in the initial trading hours but a surge towards the session's end saw the benchmark index register a gain of 11.02 points on the day. Nepse settled at 1,253.06 points.

The equity index logged in its biggest daily gain since mid-May to break its four day declining run. Tuesday's advance can mainly be attributed to the strength seen in the heavyweight banking segment as a whole amid rumors of possible merger and acquisitions. Nonetheless, market activity remained low mostly. The bourse saw a total turnover of Rs 429 million.

Most of the sectors closed the day higher with insurance scrips leading the charge. Non-Life Insurance and Life Insurance sub-indices jumped 2.15% and 1.47%, respectively. Bellwether bank stocks also climbed with the group's sub-index adding over 1%. Microfinance, Mutual Funds and Hotels sub-indices meanwhile rose 0.95%, 0.87% and 0.7%, respectively. Besides all other sub-indices edged higher barring those of Trading, 'Others' and Manufacturing and Processing segments.

Shares of Mega Bank Ltd led the list of top turnover securities. Almost Rs 50 million worth of the commercial bank's scrips changed hands. Correspondingly, Prabhu Bank Ltd posted a turnover of Rs 25 million, while Standard Chartered Bank Ltd and Nepal Bank Ltd registered transactions of over Rs 24 million each. Further, other commercial bank scrips were actively traded on the day.

Among advances, Swarojgar Laghu Bitta Bikas Bank Ltd saw the best performance of the day as its share price rallied to upper circuit of positive 10%. Janautthan Samudayic Laghubitta Bikas Bank Ltd closely followed and jumped 9.49%. Surya Life Insurance Company Ltd and Century Commercial Bank Ltd also witnessed considerable strength as the respective share prices rallied 7% and 6%. Likewise, Kumari Bank Ltd and Ngadi Group Power Ltd climbed 5% each.

In terms of decliners, Union Hydropower Ltd and Civil Laghubitta Bittiya Sanstha Ltd's scrips suffered the most in Tuesday's trading. Both shares tumbled over 5%. Multipurpose Finance Company Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd followed suit with losses of over 3% each.

Arun Valley Hydropower Development Co Ltd, Arun Kabeli Power Ltd and Nepal Seva Laghubitta Bittiya Sanstha Ltd were among other losing scrips with each company falling over 2%.

In the news, Nepse published a notice in its website regarding conversion of Nabil Bank Ltd promoter shares to public shares. As per the announcement, over 9 million unit promoter shares of the commercial bank were converted to public category. Consequently, the promoter to public shareholding ratio now stands at 60:40.

ARKS technical analysis indicates the equity market forming a bullish candlestick erasing its previous day losses. Hence, buyers remained dominant in the day. Following the advance, technical indicators also indicate subsiding selling pressure despite the overall outlook still remaining bearish.

On a positive note, the index climbed the crucial 1,250 points mark. Nepse holding ground above the current level with notable volume might indicate a possible upward movement.

This column is produced by ARKS Capital Advisors Ltd

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)


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