Daily market commentary

Nepse wavers as selling pressure eases

Published On: August 22, 2019 04:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 22: The local stock index hovered along with the opening level in the beginning hours of Wednesday's trading session. The Nepal Stock Exchange (Nepse) index dipped more than 3 points in the afternoon but recouped the losses to close the day almost unchanged. At the close, the index stood at 1,214.05 points -– up 0.42 points against the session earlier.

The bourse is showing signs of consolidation in the current range with the Nepse refusing to fall further. The volumes have also dried up substantially as the selling pressure has subsided.

Nonetheless, investors still maintain a watchful stance as the market is yet to post a notable rebound. Hence, slow trading has prevailed in the sessions of late.

Traded sectors closed mixed on Wednesday. The trading sector rallied 2.56 percent driven by a surge in shares of Bishal Bazar Company Ltd. 'Others' sector followed as the group's sub-index jumped over 1 percent. Development Bank and Finance sub-indices also inched a fraction higher.

On the other hand, Hotels sub-index fell the most and closed 0.75 percent lower. Subsequently, sub-indices of Mutual Fund and Manufacturing & Processing segments posted losses of 0.36 percent and 0.29 percent. Besides, all other sub-indices edged marginally in the red.

In terms of market activity, Soaltee Hotel Ltd's shares saw a maximum transaction on Wednesday. More than Rs 42 million worth of the hotel's shares changed hands. Secondly, Machhapuchhre Bank Ltd posted a turnover of Rs 29 million. Next, NIC Asia Bank Ltd and Nabil Bank Ltd posted turnovers of Rs 17 million and Rs 10 million, respectively.

Rasuwagadhi Hydropower Company Ltd, Agriculture Development Bank Ltd and Mahalaxmi Bikas Bank Ltd were among other active scrips.

Bishal Bazar Company Ltd turned in the best performance of the day. Its share price shot up by 5.73 percent. Similarly, Panchthar Power Company Ltd and Janaki Finance Ltd also saw considerable strength as both scrips added over 4 percent each.

Other gaining scrips include Samudayik Laghubitta Bittiya Sanstha Ltd, Multipurpose Finance Company Ltd, Citizen Investment Trust and Arun Kabeli Power Ltd which saw gains of over 3 percent each.

Microfinance stocks led the decline. Ganapati Microfinance Bittiya Sanstha Ltd's shares tanked 5.44 percent. The microfinance announced a 7 percent stock dividend to its shareholders from its earnings of Fiscal Year 2018/19. Nadep Laghubitta Bittiya Sanstha Ltd and Support Microfinance Bittiya Sanstha Ltd also struggled and shed over 5 percent apiece. Energy stocks followed suit.

While Mountain Hydro Nepal Ltd fell 4 percent, Api Power Company Ltd and Chhyangdi Hydropower Ltd saw losses of over 3 percent apiece.

In the news, Shikhar Insurance Company Ltd published its fourth quarterly report on Wednesday. As per the report, the insurer saw its net profit grow by over 18 percent year-on-year to Rs 473 million. Meanwhile, Nepse has listed 1.65 million units Initial Public Offering (IPO) shares of Sabaiko Laghubitta Bittiya Sanstha Ltd in the exchange which will open trading within short order.

As per the ARKS technical analysis, the market formed a doji candlestick on the daily timeframe indicating indecision in the session. A reversal signal might be on card if the candlestick is followed by a green candlestick in the coming session.

Nonetheless, cautious trading is suggested as bears are still in control of the market as reflected by momentum indicators. A rebound from the current range backed by substantial volume might present buying opportunities for traders and investors.

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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