Daily market commentary

Stocks up for a second consecutive day

Published On: January 29, 2020 09:04 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 29: After climbing over 16 points to 1,316 points in the morning, the Nepal Stock Exchange (Nepse) index pulled back slightly at mid-day. The index then wavered around 1,310 points in the latter trading hours. Following the choppy trading session, Nepse closed the day at 1,306.15 points – up 5.52 points against the session earlier.

The market lacks any significant conviction as the bourse witnessed a steady tussle between buyers and sellers throughout Tuesday's session. Nonetheless, the index managed to end the trading on a positive note. The index has also managed to hold its footing above 1,300 points. Overall, the sentiment still remains upbeat with charm mainly seen in insurance and microfinance scrips whose rally is yet to lose major steam. Turnover also crossed Rs 1 billion mark. Over Rs 1.4 billion worth of shares changed hands in the session.

On the sectoral front, most of the segments ended the day in positive territory. Non-Life Insurance, Life Insurance and Microfinance segments were the leaders with the respective sub-indices surging over 2% each. Next, Mutual Fund sub-index rose 1%. Manufacturing & Processing, Finance and Development Bank sub-indices also ended the day slightly higher. On the other hand, Trading sector tumbled 2.91%, followed by Hotels and Hydropower sub-indices which registered losses of 1.93% and 0.82%. Banking sub-index closed essentially unchanged.

Global IME Bank Ltd, among actives, registered the highest turnover of almost Rs 100 million. Shares of Nepal Life Insurance Company Ltd also continued to trade actively. Rs 70 million worth of the life insurer's share were exchanged in the session. Neco Insurance Co Ltd, Nepal Bank Ltd and Citizen Investment Trust, subsequently, saw transactions worth Rs 46 million, Rs 45 million and Rs 44 million, respectively. Other life insurance stocks followed suit.

Shikhar Insurance Co Ltd turned in the best performance of the day. Its share price rallied 8%. Shares of Nadep Laghubitta Bittiya Sanstha Ltd and Citizen Investment Trust also saw considerable strength with both closing over 6% higher each. Everest Insurance Company Ltd rose 5.81%, Swabhimaan Laghubitta Bittiya Sanstha Ltd jumped 4.95% and Samriddhi Finance Company Ltd added 4.85%.

In contrast, Guheshwori Merchant Bank & Finance Co Ltd and Rasuwagadhi Hydropower Company Ltd's shares came under the hammer. Both closed over 4% lower. Infinity Laghubitta Bittiya Sanstha Ltd, Salt Trading Corporation, Sanjen Jalavidhyut Company Ltd and Sindhu Bikash Bank Ltd shed over 3% each.

In terms of major earning news, Nepal Bank Ltd published its second quarterly financials on Tuesday. Despite the bank reporting an 18.60% year-on-year decline in its net profit to Rs 1.35 billion, it's per share earnings stands at a healthy Rs 27.57 subject to bonus share adjustment.

In the technical front, the market formed a small bullish candlestick on the daily time frame. However, the indication from momentum gauges remain mixed. Hence, some indecision can be expected in the coming sessions. Meanwhile, the market maintaining above 1,300 points mark gives some hope for the investors for another rebound. In contrast, a breach of the aforementioned level to the downside can fuel further sort term selling.

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)

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