Daily Market Commentary

Nepse begins the week in the red

Published On: January 14, 2019 12:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 14: Stocks came under pressure throughout the first trading day of the week. The benchmark Nepal Stock Exchange (Nepse) index witnessed a steady decline since early trading to reach to as low as 1,173.29 points in the afternoon. Despite a small pullback in the closing hour, Nepse posted a loss of 5.78 points to settle at 1,175.05 points.

The index has continued to trade within a narrow range since the beginning of 2019. Further, trading activity has also remained largely subdued in the sessions of late, as investors seem reluctant to take any major positions in the market. The bourse registered a total turnover of over Rs 372 million.

Following the broader index, most of the major sub-indices shed points. Only 'Others' and Manufacturing & Processing stocks eked out gains on the day to close marginally higher. Non-life Insurance scrips came under pressure on the day dragging the group's sub-index down by 1.26 percent. Microfinance sub-index followed suit with a drop of almost 1 percent. Sub-index of Hotels group followed suit and shed 0.74 percent. Meanwhile, sub-index of bellwether banking stocks inched 0.62 percent lower.

In terms of market participation, Nepal Bank Ltd's shares witnessed the highest turnover in the session, accounting for more than 30 percent of the day's total turnover. Over Rs 115 million worth of the commercial bank's shares changed hands on the day. Next, NIC Asia Bank Ltd registered turnover of over Rs 28 million worth of shares followed by Bank of Kathmandu Ltd with shares worth Rs 22 million traded. Meanwhile, Nepal Life Insurance Company Ltd and Citizens Investment Trust's shares logged turnover of Rs 16 million and Rs 15 million, respectively. Shares of recently-listed Upper Tamakoshi Hydropower Ltd also witnessed substantial transaction as more than Rs 11 million worth of its shares were traded. 

Among advances, Womi Microfinance Bittiya Sanstha Ltd was the biggest gainer of the day. Its share price rallied to hit the upper circuit of 10 percent after the microfinance company proposed to issue 100 percent right shares to its shareholders. Additionally, Citizens Investment Trust added to its recent surge with a gain of more than 4 percent. Central Finance Company Ltd's shares also witnessed considerable strength following its cash dividend announcement of Rs 7 per share. Similarly, Shree Ram Sugar Mills also saw its share price climb by over 3 percent. Besides, share prices of Tinau Development Bank Ltd and Citizens Bank International Ltd increased by over 2 percent each.

Shares of Bhargav Bikas Bank Ltd, on the other hand, came under significant pressure as its share price tanked 5.71 percent. Microfinance scrips followed suit as shares of Swadeshi Laghubitta Bittiya Sanstha Ltd, Arambha Microfinance Bittiya Sanstha and Support Microfinance Bittiya Sanstha Ltd depreciated by 5 percent each. Taragaon Regency Hotel Ltd, Ankhu Khola Jalavidhyut Company Ltd and IME General Insurance Ltd were among other top losers of the day.

On corporate front, Om Development Bank Ltd has declared 12.70 percent bonus shares to its shareholders. The decision, however, is subject to approval from the Class 'B' bank's Annual General Meeting (AGM).

As per the ARKS technical analysis, the market formed a bearish candlestick on the daily timeframe.

Nonetheless, the index has continued to trend in a confined spectrum. Technical indicators also suggest a neutral momentum prevailing in the equity market as the market is yet to show signs of a possible direction.

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