Daily market commentary

Nepse up 19 points as stocks rally

Published On: April 25, 2019 08:32 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: After initially showing lack of direction in morning trading, stocks witnessed significant strength after midday. Nepal Stock Exchange (Nepse) index climbed to as high as 1,267 points in the afternoon but pulled back slightly. However, stocks witnessed another surge toward the close that pushed the benchmark index 19.14 points higher to 1,279.29 points. After erasing Monday's losses, the index climbed close to its previous high reached in last September. The sentiment has remained fairly bullish as banking stocks has continued to rally since early March. The surge seen in the day was also accompanied by active market participation. More than Rs 950 million worth of shares were exchanged on the day.

Most of the traded sectors closed the day in green. Maximum gains came from Hotels scrips as reflected by a 3.38 percent growth in its sub-index. Development Bank and Banking sub-indices followed suit, logging gains of over 2 percent each. Next on the list were Finance and 'Others' sub-indices which ended the day 0.63 percent and 0.59 percent higher, respectively. Microfinance, Non-life Insurance and Life Insurance scrips also edged higher. Only, Hydropower and Manufacturing & Processing sub-indices ended the day lower.

Shares of Nepal Bank Ltd witnessed the highest transaction on the day as over Rs 90 million worth of the commercial bank's shares changed hands. Similarly, Global IME Bank Ltd registered turnover of over Rs 71 million. Subsequently, NIC Asia Bank Ltd and Prabhu Bank Ltd posted turnovers of Rs 64 million and Rs 62 million, respectively. Janata Bank Nepal Ltd, NMB Bank Ltd and Prime Commercial Bank Ltd were among other active stocks of the day. Among gainers, share price of Everest Insurance Company Ltd hit the upper circuit for the third straight day on Wednesday following its book closure for rights issue. Samudayik Laghubitta Bittiya Sanstha Ltd and Sahayogi Bikas Bank Ltd saw their respective share prices climb up by 6.88 percent and 6.67 percent, respectively. Meanwhile, Mega Bank Ltd and Prabhu Bank Ltd Promoter Share registered advances of over 6 percent each. Other commercial banks followed suit.

Share price of Radhi Bidyut Company Ltd, on the other hand, tumbled by 5 percent on the day. Further, Civil Laghubitta Bittiya Sanstha Ltd and Nepal Community Development Bank Ltd registered declines of 4.86 percent each. Arambha Microfinance Bittiya Sanstha Ltd, Janaki Finance Ltd and Api Power Company Ltd saw their share prices go down by 4 percent each.

Among companies publishing their financials for the third quarter, Lumbini Bikas Bank Ltd reported a substantial 86.26 percent year-on-year growth in its earnings. Its net profit stands at Rs 343 million. Similarly, Samata Microfinance Bittiya Sanstha Ltd's net profit grew to Rs 14.85 million from Rs 3.62 million in the corresponding quarter previous year.

As per the ARKS technical analysis, the index formed a bullish candlestick on the daily timeframe and is on the verge of testing its strong resistance at 1,280 points. Overall sentiment remains firmly bullish as reflected by technical indicators. A momentous breach of 1,280-point level might indicate further upward rally in the forthcoming sessions.

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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