daily market commentary

Stocks gain for second straight day

Published On: August 15, 2018 08:40 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Nepal Stock Exchange (Nepse) index continued its winning streak on Tuesday as well, gaining 6.61 points compared to a day earlier to close at 1180.98 points.

Despite moving slightly higher in the initial trading period, stocks began declining soon after, as the benchmark index was trading more than 4 points lower mid-day. However, the Nepal Stock Exchange (Nepse) index staged a comeback in the afternoon and pared all its losses to end the day in green. 

Nepse added to the previous session's gains as investors seemed enthused after few major commercial banks published positive earnings reports on Tuesday. Nonetheless, market participation stayed in the lower end of the spectrum as only Rs 189 million worth of shares were traded in the bourse on the day. Sectoral stocks also moved in tandem with the broader benchmark index with biggest gains coming from Trading stocks. Its sub-index went up by 2.5 percent. Similarly, strength was also visible among Finance scrips as its sub-index surged 1.73 percent. Similarly, Microfinance land Development bank sub-indices also leapt 1.05 percent higher. Only, Hotels and 'Others' sub-indices closed the session lower.

Nepal Investment Bank Ltd was the most active scrip on the day after the commercial bank reported 26 percent year-on-year growth in its net profit. Its un-audited net profit for Fiscal Year 2017/18 stands at Rs 3.96 billion. The bank's shares worth Rs 8.55 million changed hands on the day. Besides, shares of Nepal Life Insurance Company Ltd and Om development Bank Ltd were also actively traded, posting turnover of Rs 8 million and Rs 7 million, respectively. Prime Commercial Bank Ltd also recorded turnovers of almost Rs 7 million. The bank published its financial report for the fourth quarter of FY2017/18 on Tuesday, posting a decent 42.33 percent increase in its net profit to Rs 1.94 billion.

Arambha Microfinance Bittiya Sanstha Ltd continued to lead the list of advancing stocks as the scrip hit the upper circuit level of 10 percent. Similarly, share price of Himalayan Distillery Ltd also surged over 8 percent on the day. Additionally, Finance stocks turned in some of the best performance of the day as City Express Finance Ltd, Pokhara Finance Ltd and Gurkhas Finance Ltd closed over 5 percent higher. 

On the other hand, Multipurpose Finance Company Ltd took a knock of over 5 percent and continued its tumble for the fifth straight day. Further, stocks of Barun Hydropower Company Ltd and Unilever Nepal Ltd lost over 2 percent each. Similarly, shares of Himalayan Power Partner Ltd and Mithila Laghubitta Bittiya Sanstha Ltd's shares also came under pressure, losing 2 percent each.

Among the companies announcing dividends on Tuesday, Pokhara Finance Ltd declared 5 percent bonus shares and 8.68 percent cash dividend while Mero Microfinance Bittiya Sanstha Ltd has announced 15 percent bonus shares and 11.32 percent cash dividend to their shareholders.

ARKS technical analysis indicates the index advancing for the second day in a row after hitting a 2-year closing low on Sunday. As a result, the index has just settled at the resistance level of 1,180 points. Meanwhile, Relative Strength Index (RSI) has bounced from the oversold zone. A short term uptrend can be confirmed if the market climbs the current crucial level with significant market activity. 

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