March 16, 2019 08:45 AM NPT
KATHMANDU: After witnessing a sustained surge in the previous week, stocks eased slightly in the first trading day of the week as the Nepal Stock Exchange (Nepse) index posted a gain of a modest 0.94 points on Sunday.
Local equities continued their bullish momentum with advances of over 14 point and over 20 points in Monday and Tuesday's sessions, respectively. The index retraced 13 points on Wednesday but ended the week on a positive note as the index climbed over 5 points on Thursday. Overall, Nepse index added over 27.69 points or 2.46 percent to close the week at 1,155.46 points.
The bourse stretched its advance for a second consecutive week as investors seemed enthused to pick up stocks in some of the lowest prices after the index hit a fresh 3-year low in the previous week. Further, investors also approached the market with optimism over possibility of easing interest rates. Market participation also improved in the review period as the exchange recorded a total turnover of almost Rs 2 billion.
Class 'A' stocks slightly outperformed the broader market reflected by a 2.65 percent rise in the Sensitive Index. Among traded sectors, Hydropower stocks, which witnessed some of the biggest declines recently, recovered the most. The group's sub-index shot up by 3.73 percent.
Heavyweight banking stocks also pushed the market higher as the respective sub-index rallied 3.61 percent.
Meanwhile, Trading sub-index also posted a gain of over 3 percent. Finance, Development Bank and Hotels stocks also saw considerable strength as the respective sub-indices closed over 2 percent higher each. Besides, all other sub-indices closed in the green, barring Manufacturing & Processing sub-index.
In terms of market activity, more than Rs 210 million worth of National Life Insurance Company Ltd Promoter Shares changed hands in the week. Next, Nepal Life Insurance Company witnessed a total turnover of Rs 93 million followed by Nepal Credit and Commercial Bank Ltd with a total transaction of over Rs 92 million. Correspondingly, shares of Upper Tamakoshi Hydropower Ltd, Prabhu Bank Ltd and NIC Asia Bank Ltd were also actively traded.
In the review period, Nepse listed 2.16 million units of SBL Debenture 2082 and 1.35 million units of Sanima Debenture 2085. Besides, over 2 million unit IPO shares of Asha Laghubitta Bittiya Sanstha Ltd and 1.97 million unit right shares of Jebils Finance Ltd were also listed in the exchange.
On the corporate front, two commercial banks are now in process of acquiring finance companies, separately. While Global IME Bank Ltd is set to acquire Hathway Finance Ltd, Jebils Finance will be acquired by Nepal Investment Bank Ltd.
Similarly, Shine Resunga Development Bank Ltd has announced acquisition of Purnima Bikash Bank Ltd to promote itself to national level class 'B' bank. Earlier, the bank's coverage included only 10 districts.
ARKS weekly technical analysis indicates a bullish candlestick formation reflecting the week's gains. Weekly Moving Average Convergence/ Divergence (MACD) is on the verge of forming a golden cross and Relative Strength Index (RSI) is tilting upwards reflecting upbeat sentiment in the market.
Hence, a further improvement in the equity index can be expected in the short run given the bourse maintains the current level of market activity.
This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)