Daily Market Commentary

Stocks post modest gains

Published On: June 25, 2019 04:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 25: Stocks opened trading on a flat note on Monday and turned choppy throughout the day. The benchmark Nepal Stock Exchange (Nepse) index, which was unchanged till late afternoon, witnessed a rise in the last trading hour. The index, consequently, closed the day 5.75 points higher at 1,260.10 points.

With the day's gain, the index recouped some of its previous day's losses. Further, the index has continued to turn in sideways movement as the market has lacked conviction of late. Investors seem to take a more cautious stance ahead of the fiscal year-end and impending monetary policy unveiling. Turnover remained low with the local bourse registering a total transaction of Rs. 481 million on the day.

Most of the traded sectors closed the day higher. Hotels, Microfinance and 'Others' stocks led the day's charge with their respective sub-indices adding over 1 percent each. Hydropower, Banking, Manufacturing & Processing, and Finance segments also closed the day marginally higher. On the other hand, Mutual Fund, Development Bank, Non-Life Insurance and Life Insurance scrips edged lower.

Shivam Cements Ltd led the list of active stocks as more than Rs 51 million worth of the manufacturing company's shares were traded on the day. Chilime Hydropower Company Ltd and Nepal Investment Bank Ltd Promoter Share followed suit with turnover of over Rs 26 million and Rs 25 million, respectively. Deprosc Laghubitta Bittiya Sanstha Ltd, Nepal Bank Ltd and Prabhu Bank Ltd, meanwhile, registered turnovers of Rs 21 million, Rs 20 million and Rs 16 million, respectively.

Janautthan Samudayik Laghubitta Bikas Bank Ltd, among gainers, turned in the best performance of the day. Its share price rallied by almost 10 percent. Ganapati Microfinance Bittiya Sanstha Ltd followed as its share price also shot up by over 9 percent. Civil Laghubitta Bittiya Sanstha Ltd and Arun Kabeli Power Ltd posted gains of 6.94 percent and 5.56 percent, respectively. Swabhimaan Laghubitta Bittiya Sanstha Ltd, Swadeshi Laghubitta Bittiya Sanstha Ltd and Swarojgar Laghu Bitta Bikas Bank Ltd were among major gainers of the day.

In contrast, Multipurpose Finance Company Ltd witnessed correction the most. Its share price tanked by 9.61 percent. Share prices of Unnati Microfinance Bittiya Sanstha Ltd fell by 4.53 percent, while City Express Finance Co Ltd and Panchakanya Mai Hydropower Ltd saw their respective share prices fall by 3 percent each. Other declining scrips include Rastriya Beema Co Ltd, Kalika Power Company Ltd and Unilever Nepal Ltd.In corporate space, NMB Bank Ltd has notified Nepse about the approval for its proposal to undergo merger with Om Development Bank Ltd -- a class 'B' financial institution.

As per the ARKS technical analysis, the market formed a bullish candlestick on the daily timeframe as the market has touched the 1,260-point mark. After losing values in the beginning weeks of June, the market is witnessing consolidation at the crucial 1,250 to 1,260-point range. Selling pressure is easing off in the current scenario as reflected by technical indicators. Nonetheless, the movement at around current zone must be carefully monitored as it is likely to indicate Nepse's possible direction for the short run.

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