Weekly market commentary

Nepse sheds 33 points in the week intensifying market out

Published On: September 14, 2019 11:18 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Local equities struggled throughout the week with the biggest loss coming in the first trading session of the review period. The Nepal Stock Exchange (Nepse) index witnessed a loss of 12.61 points on Sunday. The market also saw weakness on the subsequent trading day as the index suffered a loss of 9.55 points on Monday. 

Despite the selling pressure subsiding in the latter trading days, Nepse closed slightly in the red in each of those sessions. Tuesday, Wednesday and Thursday witnessed declines of 2.24 points, 3.46 points and 5.33 points, respectively. Overall, the market posted a loss of 33.19 points or 2.79% to end week at 1,157.88 points.

Weakness among all major sectors took a serious toll on the broader index resulting in the heavy weekly loss. The decline is the biggest one-week slump seen in the year 2019 so far. With the decline, the index also stretched its losing run for 8 straight weeks as investors continue to flee the market fearing more downfall on the card. 

On a positive note, few of the heavyweight banks have announced dividends for Fiscal Year 2018/19 which has helped the respective stocks hold ground despite persisting downward movement of the Nepse index. Market participation remained subdued throughout the week. Turnover stood at just over Rs 1.5 billion mark.

Sensitive Index, gauging Class 'A' stocks' performance, also reflected broader market's movement. It fell 2.35% . Among traded sectors, Non-Life Insurance, Life Insurance, Hotels and Hydropower segments tumbled the most. 

The respective sub-indices tanked over 4% each heavily weighing on the broader Nepse index. 'Others' segment also dipped almost 4% in the week. Meanwhile, Microfinance, Banking and Manufacturing & Processing sub-indices dropped at least 2% apiece. Similarly, all other sub-indices closed the week lower.

On the corporate front, Janaki Finance Ltd declared 22% bonus shares to its shareholders in the week. Microfinance stocks followed suit. Wholesale microfinance RSDC Laghubitta Bittiya Sanstha Ltd announced 6% bonus shares and 10% cash dividend to its shareholders. Further, Chhimek Laghubitta Bittiya Sanstha Ltd will be distributing 27% bonus shares and 17% cash payout, while Laxmi Laghubitta Bittiya Sanstha Ltd's shareholders will be entitled to 15% stock dividend and 11% cash dividend.

ARKS weekly technical analysis indicates the market forming a bearish marubozu candlestick indicating constant selling pressure witnessed throughout the week. Weekly technical indicators also indicate bearish sentiment prevailing in the equity market. 

Relative Strength Index has slumped towards oversold zone reflecting considerable weakness in the bourse. Similarly, Moving Average Convergence Divergence (MACD) line is also trending in negative territory indicating downtrend in action. 

Immediate support of the market lies at 1,140 points, the breach of which will indicate further possible slump in the equity market.

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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