Stock market opens post-holiday trading on a bullish note as commercial banks surge

Published On: October 29, 2020 09:11 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Oct 28: Strength from the pre-holiday sessions carried over to Wednesday’s trading as the Nepal Stock Exchange (Nepse) index saw continuous advance throughout the session. After climbing around 15 points in the first trading hour, the benchmark pulled back slightly. However, a steady advance saw the index make fresh intraday highs throughout the trading hours. At the close, Nepse ended at 1,647.46 – up 41.20 points against the session earlier.

The Wednesday’s gain also marks the fifth straight day of advance as investors look to take major buying positions in heavyweight commercial banks. Market breadth also remained largely in favor of bulls as 132 scrips advanced, while only 25 stocks landed in red. 10 securities ended flat. With reignited enthusiasm in banking stocks, turnover also shot up sharply. Over Rs 2.72 billion worth of securities were traded in the session.

In terms of sectoral performance, Banking sub-index led the gains and closed up by 4.27%. Development Bank and Hotels sectors also saw considerable strength with the respective sub-indices rising 2.91% and 1.89%. Finance, ‘Others’, Mutual Fund and Life Insurance segments registered gains of over 1% each. All other segments inched higher, while only Trading sub-group suffered minor decline.

Global IME Bank Ltd was the most actively traded scrip of the day. Over Rs 206 million worth of the shares changed hands after the commercial bank announced 16% dividend in the week earlier, which includes 14% bonus shares and 2% cash dividend. Prime Commercial Bank Ltd and Prabhu Bank Ltd closely followed with turnovers of Rs 174 million and Rs 163 million. Citizens Bank International Ltd, Nepal Bank Ltd, Kumari Bank Ltd and NIC Asia Bank Ltd were also heavily traded on the day.

Prime Commercial Bank Ltd, Nepal Finance Ltd and Citizens Bank International Ltd saw massive buying interest as all three scrips rallied more than 9% in the session. Prabhu Bank Ltd and Sunrise Bank Ltd posted gains of 8.50% and 7.57%. Other commercial banks also saw notable strength in the session.

Panchakanya Mai Hydropower Ltd, on the other hand, saw the biggest percentage loss of the day. The energy sector’s share price tanked 3.47%. Other hydropower stocks also saw major corrections. Ridi Hydropower Development Company Ltd, Mountain Hydro Nepal Ltd and National Hydropower Company Ltd fell 2.75%, 2.67% and 2.65%, correspondingly.

As per the ARKS technical analysis, the index managed to firmly breakout above 1,600-point psychological mark. Wednesday’s move was also accompanied by a strong bullish candlestick on the daily timeframe. A second consecutive close above 1,600 point’s level with continuous increase in volume has, hence, validated the breakout. Further, technical indicators also suggest that the market has more legs to the upside with a test of 1,700 point’s psychological mark highly likely.

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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