Daily market commentary

Market activity drops as stocks inch lower

Published On: November 20, 2019 08:32 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) witnessed another lackluster trading session on Tuesday. With the index hovering around the opening level throughout the day, it failed to make any notable moves towards either side. Eventually, Nepse index ended Tuesday's trading at 1,129.99 points with a modest drop of 1.14 points.

Indecisiveness has persisted in the Nepalese equity market amid no major news or events to drive the securities market higher. More companies continue to declare their dividends for the Fiscal Year 2018/19, but investors remain unmoved by the recent announcements over uncertainty of a sustainable rebound. Overall market participation was also subdued on the day. Only Rs 259 million worth of stocks changed hands.

Sectoral indices ended the day mixed. Trading sub-index jumped 6.51% followed by Hotels sub-index which climbed 2.85% with the sector erasing previous losses. 'Others', Mutual Fund, Development Bank, and Manufacturing & Processing sectors also edged higher. On the other hand, Non-Life Insurance stocks suffered. The group's sub-index dropped almost 1%. Life Insurance and Finance sub-indices sank at least 0.5%. Hydropower, Banking and Microfinance segments also edged lower.

NMB Bank Ltd headed the list of top turnover scrips. Over Rs 32 million worth of the shares changed hands. The commercial bank's promoter shares were also heavily traded with a turnover of Rs 20 million. Further, Nepal Bank Ltd and Muktinath Bikas Bank Ltd Promoter Share registered transactions of Rs 18 million and Rs 15 million, respectively. Nabil Bank Ltd, Soaltee Hotel Ltd and Himalayan Distillery Ltd were among other active stocks.

Shares of Salt Trading Corporation shot up by 10% as the manufacturer continue to witness back to back rallies. Ghodi Ghoda Laghubitta Bittiya Sanstha Ltd also surged 9.85%. Nepal Hydro Developers Ltd and Ngadi Group Power Ltd, similarly, rallied over 9% each. Furthermore, Universal Power Company Ltd, Joshi Hydropower Development Company Ltd and Janautthan Samudayic Laghubitta Bikas Bank Ltd posted gains of over 5% each.

In contrast, Sindhu Bikash Bank Ltd was the worst performer of the session with its share price tanking 8%. Few energy stocks also came under major pressure on Tuesday. Arun Kabeli Power Ltd, Arun Valley Hydropower Development Co Ltd and Ankhu Khola Jalvidhyut Company Ltd posted declines of 4.8%, 4.08% and 3.57%, respectively. Other top losing scrips include Karnali Development Bank Ltd, Prudential Insurance Co Ltd and Shrijana Finance Ltd.

On the corporate front, Soaltee Hotel Ltd declared fiscal year 2018/19's dividend to its shareholders. As per its notice to Nepse, the hotel will be endorsing 15% bonus shares and 11.31% cash dividend from its upcoming annual general meeting (AGM).

The equity index, as per the ARKS technical analysis, formed a bearish spinning top candlestick on the daily timeframe which indicates the market failing to see any major moves on the day. Despite the loss, the overall Nepse's trend has been sideways for more than two months. Further, technical indicators also show no signs of any major change in the index's direction. For a reversal to follow, the index's breach over 1,150 points mark is crucial.

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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