Daily market commentary

Stocks climb for a second straight day

Published On: July 31, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 31: The benchmark Nepal Stock Exchange (Nepse) index opened Tuesday's trading on a positive note and climbed over 6 points early in the afternoon.

Stocks shed some of its earlier gains in the remaining trading hours but mostly managed to close the day in green. At the close, Nepse stood at 1,259.37 points with an advance of 3.39 points compared to Monday's session.

Stocks are showing sign of recovery as the bourse has found some ground after two straight days of losses. However, market activity has slumped significantly in the recent sessions. Most of the investors remain cautious amid lack of any concrete direction in the equity market. Only Rs 294 million worth of securities changed hands on the day.

Traded sectors closed mixed but mostly favored bullish territory. Microfinance stocks continued to outperform. The group's sub-index rose 1 percent on the day. Further, Non-Life Insurance and Development Bank sub-indices registered advances of 0.46 percent and 0.45 percent, respectively. Hotels, Hydropower, Banking, 'Others' and Finance segments also eked out marginal gains. On the other hand, Trading stocks struggled as reflected by a 1.29 percent decline in the group's sub-index. Sub-indices of Mutual Fund, Life Insurance and Manufacturing & Processing segments also fell marginally.

Siddhartha Bank Ltd Promoter Shares were the most actively traded scrip of the day. More than Rs 31 million worth of the share changed hands. Nepal Bank Ltd and Prabhu Bank Ltd, subsequently, saw turnovers of Rs 15 million and Rs 14 million.

Agriculture Development Bank Ltd, Nepal Life Insurance Company Ltd and Shivam Cements Ltd were also actively traded in the session.

Shares of United Insurance Co Ltd rallied 10 percent after the price was adjusted in the day for 240 percent right share issuance. Besides, three microfinance scrips surged to the upper circuit mark. Naya Nepal Laghubitta Bikas Bank Ltd, Nepal Agro Laghubitta Bittiya Sanstha Ltd and Sparsha Laghubitta Bittiya Sanstha Ltd saw gains of almost 10 percent each. Other microfinance scrips followed suit.

On the other hand, shares of Union Hydropower Ltd and Multipurpose Finance Company Ltd suffered the most and tanked over 6 percent each. Similarly, Siddhartha Insurance Ltd and Guheshowori Merchant Bank & Finance Co Ltd fell over 3 percent each. Sindhu Bikash Bank Ltd, Pokhara Finance Ltd and Sanima Equity Fund were among other top losing securities.

Global IME Bank Ltd and Nepal SBI Bank Ltd published their fourth quarterly earnings reports on Tuesday. While after tax profit of Global IME Bank Ltd shot up by 33 percent, Nepal SBI Bank Ltd's profit grew by 14 percent compared to corresponding quarter in the previous year. Likewise, RMDC Laghubitta Bittiya Sanstha Ltd and Mero Microfinance Bittiya Sanstha Ltd also reported substantial growth in their respective earnings.

ARKS technical analysis indicates the index extending recovery for a second straight day. The index has changed its course after dropping to around 1,250 point's level. However, the rebound is not accompanied by notable volume suggesting absence of any real momentum behind the current movement. Technical indicators also signal lack of direction in the bourse. Hence, further cautious trading is suggested in the upcoming sessions.

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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