Daily Market Commentary

Nepse flat as investors await monetary policy

Published On: July 11, 2019 05:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) index came under some pressure in the morning and dropped more than 4 points in the initial trading hour on Wednesday. Though stocks recovered in the afternoon, they continued to witness choppy session till close. The benchmark index closed the day 1.12 points lower at 1,249.15 points.

The local bourse continued to witness lack of direction as investors have kept from taking any significant position in the market. The monetary policy for upcoming fiscal year, which is expected to be released this weekend, is one of the reasons behind the indecisiveness seen among investors. Market participation remained moderate on the day with a total turnover of Rs 573 million.

On sectoral front, most of the sub-indices closed lower following the broader index. Mutual Fund and Manufacturing & Processing sub-indices led the losses, each declining by over 1%. 'Others' sub-index followed logging loss of 0.96%. Hydropower, Non-Life Insurance, Hotels, Development Bank and Finance sectors also fell marginally. Only Microfinance, Banking and Life Insurance segments edged higher.

Civil Bank ltd Promoter Share posted the biggest turnover of the day as more than Rs 175 million worth of the scrips changed hands. Citizen Investment Trust was next with total turnover of Rs 41 million. Furthermore, Nepal Bank Ltd, NIC Asia Bank Ltd and Shivam Cements Ltd were among other active stocks of the day.Infinity Laghubitta Bittiya Sanstha was the biggest gainer of the day as its share price rallied to hit the upper circuit of 10%. Subsequently, Summit Laghubitta Bittiya Sanstha Ltd, Multipurpose Finance Co Ltd and Nepal Hydro Developers Ltd logged gains over 4% each. Further, National Microfinance Bittiya Sanstha Ltd and Ridi Hydropower Development Company Ltd saw their respective share prices over 3% each.

Civil Laghubitta Bittiya Sanstha Ltd, in contrast, registered the worst performance of the day as its share price tanked almost 10%. Shares of Kanchan Development Bank Ltd and Ankhu Khola Jalvidhyut Company Ltd, meanwhile, fell by 6% and 5%, respectively. Nabil Equity Fund, Corporate Development Bank Ltd and Ghalemdi Hydro Ltd were among other losing securities.In corporate space, Global IME Laghubitta Bittiya Sanstha Ltd is set to launch 100% rights issue to its shareholders. The microfinance institution has already received Securities Board of Nepal's nod for the issue. The company will be closing its shareholders' book from July 17 for the issue.ARKS technical analysis indicates a spinning top candlestick formation on the daily timeframe which suggests indecisiveness still prevailing in the secondary market. The market is still hovering around the crucial 1,250-point mark, while technical indicators shows lack of any clear direction for the secondary market. Hence, long positions can only be taken once the market breaks immediate resistance at the 1,270 points with substantial volume.

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