daily market commentary

Bearish spell continues in Nepse

Published On: August 1, 2018 07:11 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, August 1: Stocks traded slightly higher for the first half of the trading session on Tuesday. Despite gaining more than 2 points at the beginning of the session, the benchmark Nepal Stock Exchange (Nepse) index pared its initial gains mid-session and maintained negative bias throughout the remaining trading hours. Eventually, the index shed 2.91 points, or 0.24 percent, to close at 1,191.47 points. 

Market activity, which showed slight improvement in the previous session, appeared subdued on the day. Only Rs 167 million worth of shares changed hands in the secondary market. 

Investors still remained cautious as they continue to keep a close eye on the financial reports of the fourth quarter published by bank and financial institutions. The sub-indices of all major sectors showed negligible moves with most of them closing in red on the day. Only the Development Bank, Hydropower and Finance sub-indices ended the day in green.

In contrast, major weakness was visible among Hotels stocks as the sector's sub-index declined by 0.95 percent. Insurance stocks were also under pressure as the sub-indices of Life Insurance and Non-life Insurance segments shed 0.46 percent and 0.42 percent, respectively. Microfinance sub-index followed suit with a slide of 0.36 percent.

NMB Bank Ltd continued to remain the most active stock on the day. The bank turned in the highest turnover of Rs 7.88 million on the day. Next on the list was Nepal Investment Bank Ltd which recorded total transaction of just over Rs 7 million. Other banking and financial institution stocks, including Lumbini Bikas Bank Ltd, Standard Chartered Bank Ltd and Nabil Bank Ltd, were also traded actively on the day.

Siddhartha Equity Oriented Scheme Mutual Fund unit led the list of advancing securities. Its unit price climbed 4 percent. Secondly, share price of Sahayogi Bikas Bank Ltd rose 3.78 percent. Similarly, stocks of Shrijana Finance Ltd and Lumbini Bikas Bank Ltd gained over 3 percent each.

On the other hand, City Express Finance Ltd posted the highest decline for the second straight day. Its share price plunged close to the lower circuit level of 10 percent. It is closing its shareholder's book on August 6 for 167 percent rights issue. Besides, shares of Nerude Laghubitta Bikas Bank Ltd and Surya Life Insurance Company Ltd slumped over 3 percent each. Among others, NLG Insurance Company Ltd and Kisan Microfinance Bittiya Sanstha Ltd also ended lower.

On earnings front, NIC Asia Bank Ltd has published its financial report for the fourth quarter of Fiscal Year 2017/18 based on Nepal Financial Reporting Standards (NFRS). As per the report, the bank has presented a net profit growth of 5.67 percent year-on-year. Among development banks, Gandaki Bikas Bank Ltd and Muktinath Bikas Bank Ltd have reported growth of 24.75 percent and 18.19 percent, respectively. Further, Om Development Bank Ltd's net profit grew by 1.50 percent, while Shine Resunga Development Bank's net profit declined fell by 7.95 percent.

Technical analysis by ARKS suggests that the Nepse index has continued to trend range bound with a meager decline on the day. Consequently, a significant direction to the market is yet to be observed. Breakout of 1,200 points with notable momentum can give a signal for a possible uptrend.

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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