Daily market commentary

Market unchanged in thin trade

Published On: August 13, 2019 05:00 AM NPT By: Republica

KATHMANDU, Aug 13: Stocks saw a choppy session on Monday as the Nepal Stock Exchange (Nepse) index hovered along its opening level throughout the day. The market traded in green briefly at midday, but gave up gains to close the day essentially flat. The benchmark Nepse index eventually closed the day 0.13 points higher at 1,233.85 points.

The selling pressure eased off slightly after the index gave up almost 15 points in two preceding sessions. Nonetheless, the market lacks any strength amid confusion regarding the capital gains tax calculation method. Consequently, investors refrained from trading actively in the bourse. Turnover remained subdued with only Rs 314 million worth of securities traded on the day.

Market sectors showed modest moves to either side of the spectrum. Hotels stocks outperformed the broader market as the group's sub-index climbed up by 1%. Finance sub-index closed 0.47% higher. Sub-indices of Mutual Fund, Life Insurance, Development Bank, Microfinance and Manufacturing & Processing segments also eked out marginal gains. On the losing side, Trading sub-index tumbled by 2.3%. Non-life Insurance, Hydropower and 'Others' sectors also fell marginally. Heavyweight Banking sub-index ended the day almost unchanged.

Rasuwagadhi Hydropower Company Ltd and Sanjen Jalavidhyut Company Ltd continued to witness active trading in the local bourse. The energy sector stocks registered turnovers of Rs 26 million and Rs 15 million, respectively. Subsequently, Prabhu Bank Ltd recorded transactions worth Rs 14 million. Mega Bank Ltd Promoter Share and Nepal Credit and Commerce Bank Ltd logged in turnovers of over Rs 12 million each.

Among gainers, share prices of Nadep Laghubitta Bittiya Sanstha Ltd and World Merchant Banking & Finance Ltd surged by over 9% each. Similarly, Nepal Seva Laghubitta Bittiya Sanstha Ltd and Joshi Hydropower Development Company Ltd also saw considerable strength with rallies of over 7% each. Mithila Laghubitta Bittiya Sanstha Ltd, Everest Bank Ltd Con. Pref Share and Green Development Bank Ltd were among other top advances of the day.

On the other hand, Bishal Bazar Company Ltd was the major laggard with a 5.26 % slump in its share price. Mutual fund units – NIBL Pragati Fund and NIBL Samriddhi Fund -- fell by around 4 % each. Other losing scrips include Nepal Agro Laghubitta Bittiya Sanstha ltd, Laxmi Laghubitta Bittiya Sanstha Ltd, Everest Insurance Company Ltd and Guheshwori Merchant Bank & Finance Co. Ltd which saw their respective unit prices go down by over 3% each.

In earnings front, Srijana Finance Ltd published its financials for the fourth quarter of FY2018/19. The class 'C' financial institution saw its net profit grow by over 18% to Rs 159 million.As per ARKS technical analysis, the benchmark index formed a spinning top candlestick on the day, suggesting slight indecisiveness prevailing in the market. However, bears remain strong with the index still trending around its three-month low. Momentum indicators also suggest further drop likely in the coming sessions. Hence, investors are suggested to wait for a significant reversal before taking any long position in the secondary market.

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