Repost: Nepse snaps 10-week losing spree

Published On: October 5, 2019 05:58 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 4: Despite opening on a negative note, the bourse recouped earlier losses to close in the green by the end of the week. On Sunday, the bourse gave up modest 4.67 points.

However, Monday and Tuesday saw gains of over 10 points each. After some correction on Wednesday with another 4 point dip, strength persisted in the last trading day pre holidays with the index adding another 8 points. Eventually, Nepse registered a weekly advance of 19.6 points or 1.73 percent to close at 1,149.40 points.

Following the week's gain, the index closed higher after ten straight weeks of losses where the bourse gave up almost 145 points. With seller showing signs of exhaustion in the preceding week, bulls prevailed in the week on review. However, below par market participation ahead of festive seasons shows subdued momentum behind the rise. Total weekly turnover remained around Rs 1 billion only. Meanwhile, more listed companies continued to announce dividends for the year 2018/19, which has also contributed to market maintaining ground in the current level.

Sensitive Index, which gauges the performance of Class 'A' stocks, reflected the broader index's movement and climbed 1.88 percent. On the sectoral front, barring Hotels segment, all other sub-indices closed the review period higher. Hydropower stocks led the gains with a 2.54 percent advance in the group's sub-index. Heavyweight banks also drove the week's rise. The group's sub-index jumped 1.91 percent. Microfinance and 'Others' sub-indices also saw considerable strength and rose at least 1.8 percent apiece. Development Bank, Finance and Insurance sectors also added over 1 percent apiece. Besides, all other sectors eked out moderate gains.

Among actives, Shivam Cements Ltd posted the highest turnover of over Rs 78 million after the cement manufacturer said it will be distributing 15.78 percent cash dividend for the year 2018/19. Shares of Nepal Bangladesh Bank Ltd Promoter Share, similarly, saw a turnover of over Rs 70 million. Prabhu Bank Ltd, Siddhartha Bank Ltd and Bank of Kathmandu Ltd Promoter Share logged in turnovers of Rs 65 million, Rs 45 million and Rs 42 million, respectively. Other commercial bank stocks followed suit.

On the corporate front, Shree Investment and Finance Company Ltd declared 13 percent dividend on Friday including 10.65 percent cash payout and 2.35 percent bonus shares.

ARKS technical analysis indicates a bullish candlestick formation on the weekly timeframe that helped the index erase most of its previous week losses. Weekly Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also show the buyers dominating in the present context. However, the rebound will only be substantiated if the index breaches its previous high of around 1,180 points with notable volume.

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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