KATHMANDU, April 2: The Nepal Stock Exchange (Nepse) index opened trading on Monday where it lost a modest 5.45 points. However, the local stock market saw considerable strength in the latter three trading days of the week. The benchmark climbed 32.14 points on Tuesday followed by a gain of 43.37 points on Wednesday. The buying momentum lost some steam in the last trading day of the week but managed to close in green. The index rose 12.87 points higher on Thursday. Overall, the index gathered a total of 82.93 points or 3.25% ending week at 2,631.90.
After a deep correction in the month of March driven by profit booking, political uncertainty and rumors of tightening liquidity, the index has staged a notable rebound reaching close to its all-time closing high of 2,640 mark. Hence, sentiment has remained upbeat with the market looking to stretch its uptrend further. Average daily turnover in the week stood above Rs. 6 billion mark.
Class ‘A’ stocks outperformed the market slightly with the Sensitive Index closing 3.58% higher. Sectoral performance also reflects optimism in the equity market. Barring Hotels and Tourism sector, all sectors closed the week in positive territory. Leading the market were shares of Hydropower companies as the energy sector’s average rose 7.76%. Non-Life Insurance, Microfinance, ‘Others’ and Development Bank segments also saw notable strength with the respective indices rising 5.80%, 4.85%, 4.12% and 4.04%. Bellwether banks rose 2.72% on average.
In terms of market actives, Upper Tamakoshi Hydropower Ltd was the most heavily traded stock with a turnover of Rs. 1.3 billion. Nepal Infrastructure Bank Ltd and Hydroelectricity Investment and Development Company Ltd followed suit with turnovers of over Rs. 1 billion each. Chandragiri Hills Ltd, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd, Nabil Bank Ltd, Nepal Bangladesh Bank Ltd and NLG Insurance Ltd were among other top turnover stocks in the review period.
On the news front, Ru Ru Jalbidhyut Pariyojana Ltd began floating 407,706 unit shares from Friday. The Intiial Public Offering (IPO) share of the energy company is priced at Rs. 120 per share including Rs. 20 premium per share.
On the ARKS technical front, the equity market formed a strong bullish candlestick on the week reflecting sustained buying momentum. While bears were active in the beginning of March, sentiment is favoring buyers in the present context. Nonetheless, with the index trading close to its all-time high resistance, its reaction in the respective mark must be closely monitored. A breakout above the all-time high will point towards possibility of further advance, while a failure to climb above that level can see the market retrace toward 2,550 level.
This column is produced by ARKS Capital Advisors Ltd.