Daily market commentary

Nepse drops as August's slump continues

Published On: August 12, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 12: Stocks remained under pressure since the beginning of Sunday's trading hour. A steady decline in the first half of the session pushed the Nepal Stock Exchange (Nepse) index as low as 1,230 points mark.

However, the selling pressure subsided thereafter as the index recouped some of its earlier losses. Nepse closed the session with a loss of 4.84 points at 1,233.71 points.

The local bourse extended its decline further dragging the index to its fresh 3-month low. The index has suffered over 30-point loss in the month of August so far. Bears have continued to dominate the stock market despite more companies posting remarkable performance in the Fiscal Year 2018/19.

With the drop in the bourse, participation has remained in the lower side of the spectrum. Only Rs 312 million worth of shares changed hands on Sunday.

Meanwhile, sub-indices ended mixed. Among advances, Trading sub-group witnessed maximum gain as the respective sub-index jumped 5.34 percent. Hotels sub-index also closed in green with a 0.81 percent gain. 'Others', Mutual Fund and Finance sub-indices also ended Sunday's trading marginally higher.

On the other hand, Hydropower sub-index sank 0.79 percent followed by Non-Life Insurance and Life Insurance sub-indices which dropped at least 0.64 percent. Banking sub-index also fell 0.45 percent. Besides, all other sectors closed slightly lower.

Rasuwagadhi Hydropower Company Ltd and Sanjen Jalavidhyut Company Ltd continued to trade actively as the stocks marked their third day of trading. While the former saw a turnover of Rs 46 million, the latter witnessed a total transaction worth Rs 28 million.

Next, shares of Nepal Investment Bank Ltd logged in a total turnover of over Rs 13 million. Nepal Bank Ltd, Agriculture Development Bank Ltd and Nepal Life Insurance Company Ltd were among other top turnover scrips.

Shares of Salt Trading Corporation led the list of gainers. The corresponding share price rallied over 9 percent. Swabhimaan Laghubitta Bittiya Sanstha Ltd jumped 5.55 percent after the newly listed micro finance reported over Rs 25 million in earnings. Its Earnings per Share (EPS) stands at Rs 41.78. Shrijana Finance Ltd and Sanjen Jalavidhyut Company Ltd, subsequently, registered gains of over 4 percent each. Multipurpose Finance Company Ltd, Universal Power Company Ltd and Everest Bank Ltd followed suit with advances of over 2 percent.

In contrast, energy shares were amongst the hard hit stocks of the day. Joshi Hydropower Development Company Ltd and Panchthar Power Company Ltd tumbled over 8 percent apiece. Rastriya Beema Company Ltd Promoter Share and Nepal Seva Laghubitta Bittiya Sanstha Ltd posted losses of over 4 percent each. Other losing scrips include Asha Laghubitta Bittiya Sanstha Ltd, Chhyangdi Hydropower Ltd and Dibyashwori Hydropower Ltd which fell over 3 percent apiece.

In the earnings front, Hydroelectricity Development and Investment Company Ltd reported 38 percent year-on-year growth in its net profit to Rs 1,121 million. Meanwhile, Radhi Bidyut Company Ltd's earnings increased by a moderate 11 percent to Rs 55 million.

As per the ARKS technical analysis, the market formed a small bearish candlestick on the daily timeframe. With the loss, the index has tanked further below its support level at 1,240 points. Hence, more bearish movement can be expected in the coming sessions. Technical indicators also suggest seller's dominance prevalent in the present context.

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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