Daily Market Commentary

Nepse closes flat on New Year's Day

Published On: January 2, 2019 10:14 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 2: The benchmark equity index surged almost 9 points in the beginning trading hour on Tuesday but gave up all of its gains in the afternoon. The Nepal Stock Exchange (Nepse) index then wavered around the unchanged line in the closing hours to end the first trading day of the year essentially flat. Finally, Nepse posted a marginal drop of 1.36 points to settle at 1,185.91 points.

Following the minimal drop in the session, the equity market extended its losing run for the fourth straight day. After a number of listed companies closed their shareholders' books of late, the bourse saw a significant drop in the market participation. Only Rs 228 million worth of shares were exchanged in Tuesday's lackluster trading session. 

Traded sectors posted modest moves to either side of the spectrum. Sub-indices of Microfinance, Non-Life Insurance and Life Insurance scrips posted marginal gains of 0.23 percent, 0.17 percent and 0.01 percent, respectively. Conversely, sub-indices of Hydropower and Hotels sub-groups shed around 0.3 percent apiece. Heavyweight banking sub-index, meanwhile, posted a loss of 0.21 percent. Development Bank and Finance segments also closed in the red.

In terms of market activity, Nepal Life Insurance Company Ltd continued to lead the list of top turnover scrips. Insures' shares worth more than Rs 12 million changed hands. Nepal Credit and Commercial Bank Ltd registered a total transaction of over Rs 10 million. Other banking scrips followed suit as Agriculture Development Bank Ltd and Nepal Bank Ltd posted turnovers of over Rs 7 million apiece. Similarly, Neco Insurance Company Ltd logged in a total transaction of Rs 7 million.

Among advances, Kalika Laghubitta Bittiya Sanstha rallied on the day to hit the upper circuit of 10 percent. Shares of Mithila Laghubitta Bittiya Sanstha Ltd also saw considerable strength as its price rose over 5 percent. National Microfinance Bittiya Sanstha Ltd's shares climbed 4 percent, while Unnati Microfinance Bittiya Sanstha posted a gain of 3.60 percent. Siddhartha Insurance Company Ltd and Bhargav Bikas Bank Ltd also saw their respective share prices advance 3.05 percent and 2.96 percent.

On the losing front, Shangrila Development Bank Ltd's shares struggled. Its price sank almost 3 percent on the day. Similarly, shares of Radhi Bidyut Company Ltd posted a decline of 2.38 percent. Furthermore, shares of Prabhu Bank Ltd and Nagbeli Laghubitta Bikas Bank Ltd fell almost 2 percent each. Kalika Power Company Ltd, Naya Nepal Laghubitta Bikas Bank Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd were among other top losing scrips.

In the news, IME General Insurance Ltd started floating 80 percent right shares to its shareholders from Tuesday. After the capitalization of right shares, the insurer's paid-up capital will reach Rs 972 million.

ARKS technical analysis indicates the market forming a small bearish candlestick on the daily timeframe. Further, since the index swung between gains and losses in the day, the market lacks significant conviction in the current juncture. Buying pressure has also subdued following four straight sessions of losses. Hence, cautious trading is suggested unless a market posts a substantial move to either side supported by noticeable improvement in traded volumes.

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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