Daily market commentary

Nepse up 5 points partially recouping Monday's losses

Published On: October 16, 2019 10:48 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index struggled in the morning and traded marginally in the red in the initial trading hour. Stocks recovered after mid-day and climbed above the opening level in the afternoon. Stocks wavered in the green, thereafter, eventually closing the day with a gain of 5.08 points at 1,142.04 points.

After losses in two sessions after Dashain holidays, the stock market registered a moderate gain on Tuesday indicating lack of any real conviction among investors. Hence, the index has continued to move within a confined range stretching its sideways movement. Lack of any real volume also suggests investors are approaching stock market with caution in the present context. Total turnover stood at Rs 222 million. Despite the sluggishness, investors will be keeping an eye on few market heavyweight banks who are yet to announce their dividends for the Fiscal Year 2018/19.

All sectors mirrored the broad based index and closed in green. Trading, Manufacturing & Processing and Mutual Fund sectors closed flat. Gains came mainly from Hotels and 'Others' segments as sub-indices of both rose almost 1%. Life Insurance, Development Bank and Banking sectors also saw some strength with the respective sub-indices adding 0.63%, 0.53% and 0.43%, respectively. Besides, all other sub-indices posted marginal increments.

Siddhartha Bank Ltd led the list of top turnover scrips. More than Rs. 40 million worth of the bank's shares changed hands as the bank is closing its shareholders' book on Wednesday for the purpose of convening its annual general meeting (AGM). Next, Asian Life Insurance Company Ltd Promoter Share saw transaction of Rs 37 million. Subsequently, Prabhu Bank Ltd and Agriculture Development Bank Ltd posted turnovers of Rs 16 million and Rs 14 million, respectively. Shivam Cements Ltd, Chilime Hydropower Company Ltd and National Life Insurance Co Ltd were among other actives.

Among advances, RMDC Laghubitta Bittiya Sanstha Ltd turned in the best performance of the day. Its share price rallied 6% to close at Rs 625 per share. Green Development Bank Ltd and Synergy Power Development Ltd followed with gains of over 4% each. Oriental Hotels Ltd, meanwhile, climbed 3.9%. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd, Api Power Company Ltd and Reliance Finance Ltd were among other top gainers.

On the losing front, City Express Finance Co Ltd came under significant pressure shedding almost 6%. Further, shares of Himalayan Power Partner Ltd lost 3.47%. Non-Life insurers followed suit with Everest Insurance Company Ltd, Nepal Insurance Co Ltd and Himalayan General Insurance Co Ltd registering losses of 3.4%, 2.2% and 1.88%, respectively.

In the news, NMB Laghubitta Bittiya Sanstha Ltd has set its book closure date for right share issuance on October 24. The micro sector lender's proposal to issue 150% right shares was approved by Securities Board of Nepal (Sebon) last week.

ARKS technical analysis indicates the index forming a small bullish candlestick helping the market recoup some of its previous day losses. Nonetheless, the recent movements posted by Nepse lacks any significant momentum. With Nepse's range tightening amid sideways movement, a breakout in either direction from its current span might indicate a plausible direction of the equity market for the short run. Meanwhile, minor resistance lies at 1,150 points while support is provided by 1,123-point mark.

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