Daily market commentary

Nepse begins week with a dip

Published On: May 20, 2019 08:53 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Majority of stocks lacked conviction during Sunday's trading session. The benchmark Nepal Stock Exchange (Nepse) index hovered around 1,320 points in the morning. Following some selling pressure in the afternoon, Nepse fell to as low as 1,312 points. 

Stocks recouped some of its losses towards the close as Nepse ended the day at 1,316.84 points –- down 1.87 points against the session earlier. 

Nepse continued to see modest movements around 1,320 points level as the market lacked clear direction in the present context. The consolidation came after a 200 points rally witnessed since the beginning of March. Market participation, however, remained on the higher side of the spectrum. More than Rs 1 billion worth of equities changed hands in the day. 

Mixed performance was witnessed among traded sectors. Manufacturing & Processing sub-index continued to lead gains with a surge of 3.77 percent. Besides, Finance and Development Bank sub-indices climbed 0.86 percent and 0.55 percent, respectively. 

Mutual Funds, 'Others' and Hydropower sub-indices also edged higher. On the flipside, Trading sub-index suffered the most and tanked 3.21 percent. 

Insurance scrips followed suit with Non-Life Insurance and Life Insurance sub-indices dropping 0.98 percent and 0.88 percent, respectively. Hotels, Microfinance and Banking scrips also edged lower.

In terms of turnover, Nepal Bank Ltd and Shivam Cements Ltd were most actively traded in the day. While the former saw a total turnover of Rs 226 million, the latter registered total transaction worth Rs 187 million. 

Shares of Butwal Power Company Ltd and Prabhu Bank Ltd were also heavily traded with turnovers of over Rs 32 million each. Agriculture Development Bank Ltd, Himalayan Distillery Ltd and Nepal Insurance Co Ltd were the other top turnover stocks. 

Shivam Cements Ltd hit positive circuit for a second straight day. Its share price rallied 9.97 percent. 

Corporate Development Bank Ltd, likewise, shot up by 9.90 percent. Reliance Finance Ltd also surged 8.53 percent. The finance company has called for its eighth and ninth annual general meetings (AGMs) on June 10. 

The meeting is due to approve 12 percent bonus shares for the fiscal year 16/17 and 2.63 percent cash dividend for the fiscal year 17/18. Furthermore, Progressive Finance Ltd, Barun Hydropower Company Ltd and Lumbini Bikas Bank Ltd registered gains of 7.84 percent, 7.69 percent, and 6.06 percent, respectively. 

Conversely, Bishal Bazar Company Ltd turned in the worst performance in the day. Its share price tumbled 5.78 percent. Shares of Global IME Laghubitta Bittiya Sanstha Ltd, IME General Insurance Ltd and Nadep Laghubitta Bittiya Sanstha Ltd also registered losses of over 5 percent each. Nadep Laghubitta Bittiya Sanstha Ltd has reported 62 percent decline in its net profit. Rastriya Beema Company Ltd Promoter Share, Goodwill Finance Co Ltd and Ghalemdi Hydropower Ltd were among other losing scrips. 

On the earnings front, Taragaon Regency Hotels Ltd published its third quarterly financials, reporting 29 percent year-on-year growth in its earnings before bonus and tax. 

ARKS technical analysis indicates the market forming a second spinning top candlestick on the daily timeframe as the market continued to make sideways movement. Technical indicators, meanwhile, suggest slight selling pressure in the present context. The breach of 1,320 points with substantial volume might make way further upward movement in the bourse where long positions can be taken.

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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