daily market commentary

Nepse extends losses for three straight days

Published On: November 20, 2018 09:18 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 20: The benchmark equity index witnessed a continuous decline throughout Monday's session. The Nepal Stock Exchange (Nepse) index which fell below the 1,200 points mark in the previous session added to its previous losses shedding 5.90 points. At the close, the index settled at 1,189.56 points. 

Following the day's losses, the index closed in the red for three consecutive sessions. Upbeat earnings reports published by most of the listed companies failed to boost the market sentiment amid fear of higher interest rates among investors. Turnover continued to stay on the lower side of the spectrum as only Rs 212 million worth of share changed hands on the day. 

Hydropower stocks suffered the most and weighed on the broader market. The group's sub-index tanked 1.82 percent. Sub-index of Hotels scrips also came under pressure and fell over 1 percent. Meanwhile, Banking and Life Insurance sub-indices posted losses of 0.6 percent, each. Sub-indices of Microfinance, Development Bank and Non-Life Insurance scrips also edged lower. Only 'Others' and Finance sub-indices closed the day with marginal gains. 

Shares of Nepal Bank Ltd were actively traded following the listing of its Further Public Offering (FPO) shares in the previous week. The class 'A' bank posted a total transaction of over Rs 30 million. Next on the list of actives, Prabhu Bank Ltd and Nepal Telecom Ltd logged in turnovers of over RS. 10 million each. Stocks of other commercial banks including, NIC Asia Bank Ltd, Kumari Bank Ltd, Civil Bank Ltd and Janata Bank Nepal Ltd were also actively traded on Monday.

Among advances, shares of Mero Microfinance Bittiya Sanstha Ltd and Guheshowori Merchant Bank and Finance Co Ltd jumped over 3 percent each. Meanwhile, mutual fund unit of NIBL Samriddhi Fund 1 rose 2.78 percent. Micro-sector lender scrips including Janautthan Samudayik Laghubitta Bikas Bank Ltd and Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd also added 2.28 percent and 1.89 percent, respectively. 

On the losing front, shares of Everest Insurance Company registered the biggest decline of 10 percent. Shares of Samata Microfinance Bittiya Sanstha Ltd and Arun Kabeli Power Ltd also struggled and lost over 6 percent each. Likewise, Gurans Life Insurance Company Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd sank 3.87 percent and 3.79 percent, correspondingly. Other top losing scrips for the day include Nepal Seva Laghubitta Bittiya Sanstha Ltd, Mirmire Laghubitta Bittiya Sanstha Ltd and Summit Microfinance Development Bank Ltd. 

In the news, the proposed dividend of Shree Investment and Finance Co Ltd, including 8.77 percent cash payout and 1.23 percent bonus shares, received a nod from Nepal Rastra Bank (NRB). In the meantime, Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and National Microfinance Bittiya Sanstha Ltd called for their respective Annual General Meetings (AGMs) on December 11 and December 14, respectively. Both companies have endorsement of bonus shares and cash dividend as their key agendas for the meetings.

ARKS technical analysis indicates the market extending its losing run with the formation of a bearish candlestick on Monday. With the market closing below the psychological level of 1,200 points for two straight sessions and technical indicators indicating feeble momentum, the overall sentiment remains fairly bearish in the present context. 

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com

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

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