Daily market commentary

Stocks begin year in green

Published On: April 16, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 16: Stocks began first trading day of the year on a slightly bullish note. The benchmark Nepal Stock Exchange (Nepse) climbed higher in the initial trading hour but gave up all of its gains by mid-session. Nonetheless, stocks posted a rebound late in the afternoon pushing the index 4.70 points higher to close the day at 1,188.71 points.

Despite the gains seen in the day, the index has extended range bound trading, hovering around 1,180 – 1,190 points zone. Cautious trading was witnessed on the day as investors are maintaining a watchful stance before companies publish their earnings reports for the third quarter. The bourse saw a total transaction worth Rs 304 million.

Sectors turned in mixed performance with Microfinance sub-group leading gains. Many of the leading microfinance companies surged on the day pushing the sub-index higher by 3.04 percent. Hotels stocks also witnessed strength as the group's sub-index jumped 1.3 percent. Banking, Manufacturing & Processing, Development Bank and Non-Life Insurance stocks also edged higher. On the other hand losses came from 'Others' scrips. The respective sub-index sank 0.75 percent. Sub-indices of Hydropower, Finance and Life Insurance segments also closed marginally in the red.

Among actives, Neco Insurance Co. Ltd registered the highest turnover of over Rs. 27 million. Kumari Bank Ltd and NIC Asia Bank Ltd followed suit as the respective shares posted turnovers of Rs 19 million and Rs 18 million, respectively. Next, Everest Insurance Company Ltd and NMB Bank Ltd registered total transactions of over Rs 16 million apiece.

Shares of Everest Insurance Company Ltd led the list of gaining stocks. The insurer saw its share price jump 7.56 percent. Microfinance stocks also saw considerable strength. Shares of Sana Kisan Bikas Bank Ltd, Deprosc Laghubitta Bittiya Sanstha Ltd and Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd registered gains of over 6 percent each. Swabalamban Laghubitta Bittiya Sanstha Ltd, similarly, rallied almost 6 percent. United Insurance Company Ltd, Mero Microfinance Bittiya Sanstha Ltd and Synergy Power Development Ltd were among other advances.

On the other hand, shares of Nepal Community Development Bank Ltd tanked 7 percent. Next, Nadep Laghubitta Bittiya Sanstha Ltd also witnessed some selling pressure following listing of its 50 percent right shares. Its price went down by 4.44 percent.

Likewise, Vijaya Laghubitta Bittiya Sanstha Ltd posted a loss of 4.21 percent. Securities Board of Nepal (Sebon) approved 10 percent stock dividend of the micro finance company. However, the proposal to issue 100 percent right shares was rejected by the board. Further, Khanikhola Hydropower Co. Ltd and NLG Insurance Company Ltd registered declines of over 3 percent each.

On the earnings front, NMB Microfinance Bittiya Sanstha Ltd reported a 52 percent year on year growth in its net profit. As per the company's third quarterly financials, its earning stands at Rs 33.28 million.

As per the ARKS technical analysis, the Nepse index formed a small bullish candlestick on the daily timeframe. For the short term, the index is trading range bound stretching its consolidation. Technical indicators, meanwhile, suggest fairly bullish sentiment prevailing in the current scenario. A breach of immediate resistance at around 1,190 points might see a further possible move to the upside.

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