Daily market commentary

Market closes worst month since June last year

Published On: July 1, 2019 10:49 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The benchmark Nepal Stock Exchange (Nepse) index witnessed a steady decline in the first trading day of the week. Despite climbing slightly higher initially, majority of stocks came under pressure pushing the benchmark index lower on Sunday. Nepse closed the day with a decline of 12.27 points at 1,244.89 points.

The index stretched the month’s losses, ending the last trading day of the month in red. Consequently, Nepse witnessed its worst month since June last year as the month saw a total loss of over 74 points. The market, which was consolidating in the first two weeks, tumbled further as fiscal year-end approaches nearer where taxes and interest payments will be due for businesses and individuals. The bourse, meanwhile, witnessed moderate turnover as Rs 645 million worth of shares were exchanged on the day.

The broad rally pulled all the major sectors lower. Manufacturing & Processing and Non-life Insurance scrips were the major drag of the day as their respective sub-indices went down by 1.35% and 1.19%. Sub-indices of Hydropower, Microfinance and Banking segments also registered losses of over 1% each. Subsequently, all other sub-indices closed the day lower.

 Among actives stocks, Global IME Bank Ltd Promoter Share posted the highest total turnover of Rs 173 million on the day. Nepal Bank Ltd and Shivam Cements Ltd followed suit with turnovers of Rs 64 million and Rs 58 million, respectively. Prabhu Bank Ltd, Nepal Credit and Commerce Bank Ltd and Siddhartha Bank Ltd were among other active stocks of the session.

Swabhimaan Laghubitta Bittiya Sanstha Ltd, which was listed on the stock exchange only recently, extended its winning streak. The micro sector lender’s price hit the upper circuit of 10%. Second on the list was Multipurpose Finance Ltd which saw its share price go up by 5%. Arun Kabeli Power Ltd registered a gain of 3.28%, while Civil Laghubitta Bittiya Sanstha Ltd and Unilever Nepal Ltd added over 2% each.

Shares of Rairang Hydropower Development Company Ltd came under significant pressure on the day as unit price of the energy stock tanked 7% on the day. 

Gurans Laghubitta Bittiya Sanstha Ltd also extended its losses further as its share price fell for the fifth straight session logging a loss of 6%. Furthermore, Shivam Cements Ltd, Sindhu Bikash Bank Ltd and Nepal Agro Laghubitta Bittiya Sanstha Ltd reported losses of over 4% each.

In news, Nepal Rastra Bank (NRB) has permitted Sabaiko Laghubitta Bittiya Sanstha Ltd to launch its initial public offering. The class ‘D’ financial institution will be floating primary shares worth Rs 53 million. After the issue, the paid-up capital of the company will reach Rs 165 million.

ARKS technical analysis indicates the market forming a bearish candlestick, reflecting continuous selling pressure in the market. The index has now dropped below the crucial 1,250-point psychological mark suggesting further downward movement possible. Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also suggest momentum favoring the bears in the present context.

Hence, given the market fails to climb above the 1,250 points in the coming sessions, a dip to 1,220 points can be expected. 

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)


Leave A Comment