daily market commentary

Nepse takes a breather after three straight days of gains

Published On: August 17, 2018 07:23 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 17: The Nepal Stock Exchange (Nepse) index began on Thursday, adding to its previous day’s rally to reach the intraday high of 1,218.71 points. However, the benchmark index pulled back sharply and swung between gains and losses for the remaining session to close essentially flat. At the end, the index settled at 1,210.32 – a gain of a marginal 0.61 point compared to Wednesday.

Despite gaining almost 30 points in the previous session, Nepse failed to add to the gains in the volatile session as optimistic investor sentiments were mitigated by profit-booking sentiment. Nonetheless, market activity showed further improvement as the total turnover increased by 26.40 percent to Rs 455 million.

Nepse posted marginal growth as modest gains made by heavyweight banks were moderated by losses from other sectors. Banking sub-index added 0.4 percent, while Manufacturing & Processing sub-index went up by 3.6 percent. All other sectors shed values with the biggest loss coming from Trading stocks. Its sub-index dropped 1.78 percent. Hotels and Hydropower sub-indices also shed more than 1 percent each.

Banking stocks persisted as the most active stocks led by Nepal Investment Bank Ltd Promoter Share with a turnover of almost Rs 19 million. Further, shares of NMB Bank Ltd and Nabil Bank Ltd posted total transactions of over Rs 16 million each. Rastriya Beema Company Ltd Promoter Share was also actively traded after the company reported a 132.47 percent year-on-year growth in its net profit. More than Rs 14 million worth of its shares changed hands on the day.

In terms of gaining stocks, Bottlers Nepal (Tarai) Ltd rallied over 8 percent on the day after the company reported that its net profit has increased to Rs 715 million from last year’s 482 million. Unilever Nepal Ltd followed suit as the company retraced more than 6 percent. Similarly, Corporate Development Bank Ltd, Rastriya Beema Company Ltd Promoter Share and Civil Laghubitta Bittiya Sanstha Ltd were the other top gainers. 

Lalitpur Finance Ltd, on the other hand, was the worst performer of the day as its share price plunged over 9 percent. Share price of Himalayan Distillery also fell over 7 percent despite the beverage producer reporting a 500 percent increase in its net profit year-on-year. National Hydropower Company Ltd’s scrips also tumbled 4.76 percent. Among others, Himalayan General Insurance Ltd and Ngadi Group Power Ltd lost over 3 percent each.

In terms of earnings, National Life Insurance Company Ltd reported a 26.67 percent rise in its net profit to Rs 298 million as per its unaudited financial report for the 4th quarter of Fiscal Year 2017/18. Meanwhile, Surya Life Insurance Company Ltd and Asian Life Insurance Company Ltd presented modest earning growth in their earnings reports. In other news, Global IME Laghubitta Bittiya Sanstha Ltd declared 15 percent bonus shares to its shareholders on Thursday.

As per the ARKS technical analysis, the index formed a doji candlestick on the daily timeframe, reflecting the indecision witnessed in the market. Consequently, the index managed to hold above 1,200 points level. With Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) both favoring the bulls, the surge above the current 1,210 points can see the index rise to 1,250 points region. Other a pullback to 1,200 points can be expected.

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)


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