Daily Market Commentary

Turnover improves as Nepse extends gains

Published On: May 11, 2021 10:09 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 11: Stocks began Tuesday’s session on an upbeat note as the Nepal Stock Exchange (Nepse) index jumped more than 20 points in the morning. Despite a small pullback at mid-day, the bourse continued to advance in the latter part of the afternoon. The index closed trading slightly off its session high at 2,673.32 points. The day’s gain stood at 27.47 points or 1.03%.

Though the index lost some ground in the week earlier, the bourse footing in this week’s trading. Absence of heavy selling pressure suggests that a deep correction is unlikely in the current juncture, mainly as interest rates are still in the lower side of the spectrum. Market participation rose slightly but remains marginally below par. Rs. 5.81 billion worth of equities changed hands on the day. 

Trading segment registered the best performance of the day with the sub-index rallying 5.79%. ‘Others’ segment also shot up by 2.53% followed by Manufacturing & Processing sector which rose 2.42%. Life Insurance, Investment, Finance, Non-Life Insurance and Microfinance stocks also saw considerable strength and closed over 1% higher. All other sectors ended in positive territory. 

Shares of Nepal Reinsurance Company Ltd were traded the most with a turnover of over Rs. 766 million. Api Power Company Ltd and Shivam Cements Ltd, subsequently, registered transactions of Rs. 202 million and Rs. 162 million, respectively. Hydroelectricity Investment and Development Company Ltd, NRN Infrastructure and Development Ltd and United Modi Hydropower Ltd were among other active stocks. 

Bottlers Nepal Terai Ltd, Ru Ru Jalbidhyut Pariyojana Ltd, United Modi Hydropower Ltd and Guheshwori Merchant Banking and Finance Co. Ltd were the major gainers of the day with each scrip rallying 10%. Samata Gharelu Laghubitta Bittiya Sanstha Ltd, NRN Infrastructure and Development Ltd, Narayani Development Bank Ltd and Salt Trading Corporation also saw considerable strength with advance of over 7% each.

Bishal Bazar Company Ltd extended its freefall hitting negative circuit for fourth straight session after hitting intra-day high of 8,208 on May 6. The scrip tanked 10% on Tuesday. Liberty Energy Company Ltd and Barun Hydropower Co. Ltd witnessed some selling pressure with both stocks closing over 2% lower. Global IME Sammunat Scheme – 1, Panchthar Power Company Ltd, Citizens Mutual Fund – 1, Himalayan General Insurance Co. Ltd and Karnali Development Bank Ltd fell more than 1% apiece.

On the technical front, the equity market stretched its rebound after a correction in the beginning of the week. A rise in turnover has also validated the rebound making further advance likely in the shorter run. Besides, the medium term uptrend is also still in action with the benchmark trading above its 50-day Exponential Moving Average (EMA). Momentum indicators point towards a shift in momentum favoring bulls in the current context. 2,600 support level remains intact.

This column is produced by ARKS Capital Advisors Ltd.

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

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