Daily market commentary

Stocks climb as energy stocks continue to outperform

Published On: May 23, 2019 02:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 22: The local bourse opened Wednesday's trading on a positive note as the benchmark Nepal Stock Exchange (Nepse) index climbed more than 10 points to 1,322 points mark in the morning. The index wavered around 1,320 points in the afternoon to close the day slightly off its intraday high at 1,319.63 points. The index closed the day 7.49 points higher.

Nepse continued to see strength on the back of gains coming from hydropower stocks. Consequently, the equity market stretched advances for a second consecutive day. Nonetheless, Nepse has continued to trade within a narrow span of 1,300 to 1,320 points suggesting some indecision still visible in the bourse.

Most of the sectors reflected the broader market and closed in green. Only Manufacturing & Processing and Mutual Fund sub-indices closed lower with declines of 3.16 percent and 2.02 percent, respectively.

Among gainers, Hydropower sub-index surged 5.38 percent followed by sub-index of Hotels segment which rose by 2.51 percent. Further, 'Others', Life Insurance and Finance sub-indices registered gains of 1.08 percent, 0.66 percent and 0.65 percent, respectively. All other sub-indices recorded gains in the day.

Among actives, shares of Nepal Bank Ltd registered the highest turnover of over Rs 69 million. Prime Commercial Bank Ltd's shares were actively traded ahead of its book closure on Thursday for the purpose of convening Annual General Meeting (AGM). The scrip saw a total transaction of over Rs 63 million. Shivam Cements Ltd, Sanima Mai Hydropower Ltd and Upper Tamakoshi Hydropower Ltd followed suit with turnovers of over Rs 62 million, Rs 55 million and Rs 50 million, respectively.

Hydropower stocks dominated the list of top gainers. Arun Valley Hydropower Development Company Ltd and Upper Tamakoshi Hydropower Ltd' shares witnessed significant strength hitting upper circuit of positive 10 percent. Other energy stocks ensued with Arun Kabeli Power Ltd, Himalayan Power Partner Ltd and Rairang Hydropower Development Company Ltd registering gains of over 9 percent each.

In contrast, Ghalemdi Hydro Ltd tanked over 9 percent. Shares of Himalayan Distillery Ltd also corrected 6.7 percent. Similarly, Shivam Cements Ltd extended losses with a drop of 6 percent. Central Finance Co Ltd and Reliance Finance Ltd's shares also struggled with declines of over 4 percent each. NMB Hybrid Fund L-1, Civil Laghubitta Bittiya Sanstha Ltd and Pokhara Finance Ltd were among other major decliners.

In the news front, Nepal Community Development Bank Ltd is set to merge with Tinau Development Bank Ltd and Mission Development Bank Ltd. The latter two entities were already in due process for a merger while the former signed the Memorandum of Understanding (MoU) on Wednesday. In other news, 905,512 unit promoter shares of Laxmi Bank Ltd were converted to public category as per a notice published by Nepse.

ARKS technical analysis indicates a bullish candlestick formation for a second straight day as the index is on the verge to test 1,320 points resistance for a third time in one month.

Technical indicators suggest slightly subdued momentum in the present context. Hence, the movement around the current zone is crucial in depicting plausible direction of the equity market for the near term.

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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