Nepse closes firmly lower to start week

Published On: November 26, 2018 04:30 AM NPT

KATHMANDU, Nov 26: Nepalese stocks posted significant moves to the downside on the first trading day of the week. The benchmark Nepal Stock Exchange (Nepse) opened the session on a flat note. However, stocks came under pressure throughout the afternoon with the broad rally pushing the index close to its lowest closing levels since January 2016. The index posted a loss of 14.82 points to settle at 1,166.43 points.

Overall skepticism loomed in the secondary market amid absence of upbeat news in the financial space. Consequently, sellers dominated the day's trading while the bourse posted a daily turnover of Rs 250 million.

The broad downfall was also accompanied by slump in all major sectors. Manufacturing & Processing and Hydropower stocks struggled the most as their respective sub-indices dropped over 2 percent each. Furthermore, sub-indices of Non-Life Insurance, Microfinance and Hotels segments posted losses of 1.77 percent, 1.61 percent and 1.58 percent, respectively. Similarly, heavyweight banks also dragged the Nepse index down as the group's sub-index shed 1.22 percent.

NMB Bank Ltd's stocks have continued to trade actively since the bank's dividend announcement. More than Rs. 36 million worth of its shares changed hands on Sunday. Next on the list of actives, Soaltee Hotel Ltd and Nepal Bank Ltd registered turnovers of Rs 12 million and Rs 11 million, respectively. Shares of Muktinath Bikas Bank Ltd also remained active. The development bank has called for its annual general meeting (AGM) on December 15. Distribution of 18.25 percent stock dividend, among others, is its key agenda for the meeting. Other top turnover scrips include Everest Bank Ltd, Machhapuchhre Bank Ltd and Nepal Life Insurance Company Ltd.

Ngadi Group Power Ltd and NMB Sulav Investment Fund-1 turned in some of the best performances on the day with the respective securities adding over 6 percent. NMB Sulav Investment Fund-1 has set its book closure date as December 3 for the purpose of distributing 21.05 percent cash dividend. Similarly, National Hydro Developers Ltd jumped over 5 percent. Insurance scrips followed suit with NLG Insurance Company Ltd and Everest Insurance Company Ltd climbing 4.44 percent and 3.87 percent, respectively.

Conversely, NMB Microfinance Bittiya Sanstha fell the most and lost over 7 percent on the day. Meanwhile, Rairang Hydropower Development Company Ltd and Gurans Life Insurance Company Ltd posted declines of over 6 percent apiece. Chhyangdi Hydropower Ltd, Arambha Microfinance Bittiya Sanstha Ltd and Prabhu Insurance Ltd were among other losing scrips.

On the announcement front, United Modi Hydropower Ltd declared 5 percent cash dividend to its shareholders. The decision is subject to approval from the company's annual general meeting (AGM).

ARKS technical analysis indicates the index forming a bearish candlestick on the daily timeframe following the broad sell-off in the session. In the meantime, Relative Strength Index (RSI) has reached the oversold territory following sustained downward movement in the month. The index is now trending near its support of 1,163 points, the breach of which might see Nepse continuing its losing run.

This column is produced by ARKS Capital Advisors Ltd

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

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