Daily Market Commentary

Stocks close higher while market activity drops

Published On: January 15, 2019 11:00 AM NPT

KATHMANDU, Jan 15: Nepal Stocks Exchange (Nepse) index posted gains of more than 8 points in early trading on Monday traded in a confined range during afternoon session. Despite the benchmark index coming under some pressure, a sharp surge saw the index add to its initial gains to close the day fairly higher. Nepse ended the day's trading 11.74 points higher at 1,186.80 points.

The advance in the day can mainly be attributed to the abnormal surge in the share price of Upper Tamakoshi Hydropower Ltd witnessed in the morning session. Share price of the hydropower company jumped by more than 50 percent, contrary to the standard limit of 10 percent in a single day. Following the anomaly, Nepse halted the trading of the shares and later decided to cancel all the trades that were executed at the price in excess of the upper circuit limit. 

Consequently, all the trades carried out at more than Rs 246 per shares will be annulled. Meanwhile, the bourse experienced another dreary trading session as the daily turnover dropped to Rs 268 million.
All major sub-indices moved in tandem with the broader index, barring Banking sub-index which edged lower. Hydropower sub-index gained more than 14 percent contributed by the atypical gains posted by shares of Upper Tamakoshi Hydropower Ltd. 'Others' sub-index rose 2.7 percent. Similarly, among other gainers, sub-indices of Finance, Hotels and Microfinance stocks advanced more than 1 percent each. In the meantime, Non-life Insurance and Development Bank sub-indices closed marginally higher.

Nepal Bank Ltd and Citizen Investment Trust led the list of active stocks recording turnover of over Rs 47 million each. Further, Siddhartha Bank Ltd and Womi Microfinance Bittiya Sanstha Ltd registered total transactions of Rs 9 million apiece. Other commercial bank scrips, including Agriculture Development Bank Ltd, Nepal Credit and Commercial Bank Ltd and NMB Bank Ltd, followed suit.

Share prices of Citizens Investment Trust jumped by almost 10 percent on the day to hit one-year high of Rs 2,613 per share. Similarly, share price of Janautthan Samudayik Laghubitta Bikas Bank rallied 9.72 percent followed by City Express Finance Co Ltd saw its share price surge by 9.17 percent. 

Similarly, share prices of Gurkhas Finance Ltd, Womi Microfinance Bittiya Sanstha Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd registered gains of 8 percent, 6.88 percent and 5.55 percent, respectively.

On the other hand, Bank of Kathmandu Ltd posted the worst performance of the day and shed more than 5 percent. The bank closed its shareholders book on the day for organizing its Annual General Meeting (AGM). Energy stocks followed suit as share price of Arun Kabeli Power Ltd and Api Power Company Ltd slid 4.32 percent and 3.24 percent, respectively. Excel Development Bank Ltd, Green Development Bank Ltd and Hathway Finance Company Ltd were among other losing scrips.

On news front, Securities Board of Nepal (Sebon) has given consent to Asha Laghubitta Bittiya Sanstha Ltd for issuing Initial Public Offering (IPO) worth Rs 674 million. 

ARKS technical analysis indicates a bullish candlestick formation on the daily timeframe. Nonetheless, low market activity and technical indicators suggesting feeble momentum hint that the secondary market is yet to witness a significant turnaround from the current scenario. 

The immediate support for the market lies at around 1,170 points while the resistance lies at 1,200-point mark.

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