Daily market commentary

Nepse witnesses modest correction after two days of gains

Published On: October 3, 2019 10:07 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks opened in green on Wednesday as the Nepal Stock Exchange (Nepse) index climbed more than 4 points in the morning session. However, the bourse failed to hang on to its initial gains and traded flat in the afternoon. Stocks came under some pressure toward the end, eventually closing the day 4.98 points lower at 1,140.71 points.

The secondary market slightly struggled on the day after two straight days of advances. Consequently, the bourse has stretched its range-bound trading and is likely to see similar movement during the festive season. Investors, meanwhile, have largely remained off their desk in the recent sessions. 

The exchange recorded turnover of just over Rs 200 million on the day.

Most of the sectors closed the day in red. Only 'Others' and Mutual Fund segments edged higher. Hotels sector was the major laggard of the day dragged by all three stocks in the group. Insurance stocks also struggled as both Non-life Insurance and Life Insurance sub-index posted losses of over 1% each. Sub-indices of Hydropower and Manufacturing & Processing groups, subsequently, ended the day 0.77% lower. All other sub-indices closed the day marginally lower.

Among active securities, both promoter and ordinary shares of Bank of Kathmandu Ltd were actively traded as reflected by turnovers of Rs 22 million and Rs 19 million, respectively. The bank is closing its shareholders book on Thursday to hold its Annual General Meeting (AGM). Next, United Finance Ltd was Rs 15 million worth of shares traded, while Siddhartha Bank Ltd and Shivam Cements Ltd logged turnovers of over Rs 10 million each.

In terms of gaining scrips, Nepal Hydro Developers Ltd saw considerable strength as its share price rallied by 6.38%. Next, share prices of Ankhu Khola Jalvidhyut Company Ltd and United Finance Ltd surged 5% each. While Sindhu Bikash Bank Ltd saw its share price go up by 3%, Janautthan Samudayik Laghubitta Bikas Bank Ltd and NMB Sulav Investment-1 added over 2% each on their share prices.

Himalayan Power Partner Ltd and Surya Life Insurance Company Ltd led the list of losing scrips with declines of over 5% each. Central Finance Co Ltd and NLG Insurance Company Ltd also saw their share prices fall by over 4% each. Other major losers of the day include Ngadi Group Power Ltd, Saptakoshi Development Bank Ltd and Sanima Mai Hydropower Ltd.

In corporate space, Shivam Cements Ltd is holding its Annual General Meeting (AGM) on October 25. The cement manufacturer had announced 15.79 % cash dividend for the year 2018/19 which is due to be approved in the meeting.

ARKS technical analysis indicates market retracing, partially erasing previous day gain. While Moving Average Convergence Divergence (MACD) is tilted upward after forming a golden cross, Relative Strength Index (RSI) is sloped downwards. Hence, technically any clear direction is yet to be seen in the bourse. Hence, investors must look out for a clear breakout from 1,120-1,180 points range which can pave way for further course of the benchmark index.

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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