Daily market commentary

Nepse closes flat with dismal volume

Published On: July 15, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 15: Stocks witnessed some strength in the initial trading hour as the Nepal Stock Exchange (Nepse) index traded above 1,250 points. The index turned in choppy trading thereafter and hovered near the 1,250 points level for most of the trading session. At the close, Nepse stood essentially unchanged at 1,249.49 –- up a meager 0.95 points against previous week's close.

With the fiscal year end approaching, the index continued to post sideways movement. The bourse is yet to see any major moves toward either side of the spectrum with the market posting a series of relatively low turnover sessions. Sunday saw a sub-par turnover of Rs 285 million. Meanwhile, the upcoming monetary policy and the fourth quarter financial reports of listed companies are likely to set the tone for the market in the coming months.

Sub-indices ended mixed reflecting persisting indecision in the secondary market. On the gainers side, Hotels sub-index added 0.59%, while sub-indices of Development Bank and Life Insurance stocks both rose 0.55%. 'Others', Mutual Fund and Hydropower sub-indices also ended slightly in green. On the other hand, Finance sub-index shed 0.26%. Similarly, all other sectors posted marginal losses in the day.

In terms of market activity, Citizen Investment Trust posted the biggest turnover of the day. More than Rs 25 million worth of the shares changed hands. Likewise, Mega Bank Ltd Promoter Share and Nepal Bank Ltd posted turnovers of over Rs 21 million each. Nepal Life Insurance Company Ltd, Civil Bank Ltd and Chilime Hydropower Company Ltd were also actively traded in the day.

Among advances, Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd's shares shot up by almost 10% followed by Nabil Equity Fund units which rallied 7.38%. Furthermore, Panchakanya Mai Hydropower Ltd and Summit Laghubitta Bittiya Sanstha Ltd posted gains of 5.88% and 3.40%, respectively. Other gaining scrips include Dibyashwori Hydropower Ltd, Asha Laghubitta Bittiya Sanstha Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd which climbed over 2% apiece.

Conversely, Multipurpose Finance Company Ltd registered the worst performance of the day as its share price tanked over 8%. Arun Kabeli Power Ltd closely followed with a 6% decline. Microfinance scrips followed suit as Gurans Laghubitta Bittiya Sanstha Ltd, Global IME Laghubitta Bittiya Sanstha Ltd and Nadep Laghubitta Bittiya Sanstha Ltd fell around 3% each.

In the news, Shine Resunga Development Bank Ltd conducted its special general meeting (SGM) on July 12. The meeting approved the company's acquisition of two other development banks -– Purnima Bikas Bank Ltd and Bhargav Bikas Bank Ltd. Both companies will be acquired with share swap ratio of 1:0.95. Meanwhile, Machhapuchhre Bank Ltd will be floating '10.25% Machhapuchhre Bank Debenture 2085' from July 22. The debenture issue, which is worth Rs 3 billion, has a maturity period of 10 years.

ARKS technical analysis indicates the equity index trading range bound with a doji candlestick formation on the daily timeframe. Traded volume also remained subdued indicating no real momentum apparent in the bourse. Hence, the market is likely to continue to trend flat in the forthcoming sessions unless a notable breach of 1,270 points or 1,240 points towards either side is seen.

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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