Daily market commentary

Nepse closes little changed, while turnover slumps

Published On: June 26, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 26: Stocks opened Tuesday's trading on a flat note as the Nepal Stock Exchange (Nepse) index remained unchanged till mid-day. A surge followed pushing the index above 1,264 points but the market quickly gave up its gains and pulled back toward the opening level. At the close, Nepse ended the day 0.96 points higher at 1,261.07 points.

Nepse added another day into its series of bland trading sessions as the market witnessed another lackluster trading day. Range bound trading with minimal volume has been persisting in the bourse as investors are yet to trade actively in the secondary market. Daily turnover dropped as the market witnessed a total transaction worth Rs 365 million.

Mixed performance of the traded sectors contributed to the modest movement of the broader index. Manufacturing & Processing sub-index witnessed some strength and climbed 0.74%. Microfinance, Banking, Non-Life Insurance, Hydropower and Life Insurance scrips also eked marginal gains.

On the losing side, Hotels stocks struggled as the group's sub-index fell 1.02%. Trading sub-index also fell 1%. Besides, other sub-indices registered meager declines.

Nepal Credit and Commerce Bank Ltd was the most actively traded scrip with a turnover of over Rs 25 million. Similarly, more than Rs 22 million worth of Prabhu Bank Ltd's shares changed hands. Shivam Cements Ltd, Nepal Bank Ltd, and Siddhartha Bank Ltd followed suit with turnovers of Rs 19 million, Rs 17 million, and Rs 13 million, respectively.

Ganapati Microfinance Bittiya Sanstha Ltd continued to rally hitting upper circuit of 10% on the day. Other microfinance stocks also witnessed strength as Janautthan Samudayic Laghubitta Bikash Bank Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd climbed 7.56% and 4.15%, respectively.

Other top advances in the day were Unilever Nepal Ltd, Mithila Laghubitta Bittiya Sanstha Ltd, and Samudayik Laghubitta Bittiya Sanstha Ltd.

Multipurpose Finance Company Ltd, on the other hand, continued its slump. Its share price hit the negative circuit of 10% for second consecutive day. Secondly, Radhi Bidyut Company Ltd tumbled 5.59%. Meanwhile, Gurans Laghubitta Bittiya Sanstha Ltd, and Arun Kabeli Power Ltd shed 4.76% and 4.21%, respectively. Further, Muktinath Bikas Bank Ltd Promoter Share, and Swadeshi Laghubitta Bittiya Sanstha Ltd registered losses of over 3% apiece.

On the corporate front, Shine Resunga Development Bank Ltd, Bhargav Bikas Bank Ltd, and Purnima Bikas Bank Ltd have called for their respective Special General Meetings (SGMs) on July 12. Shine Resunga Development Bank Ltd is in due process to acquire the other two development banks. Hence, approval of the acquisition and determination of the corresponding swap ratios is among the key agendas of the meetings.

As per the ARKS technical analysis, the index formed a doji candlestick reflecting indecisiveness in the equity market. The bourse is still trending in the consolidation zone with no notable movement towards either side visible. In the meantime, technical indicators suggest that the selling pressure is easing off in the current context. Hence, a volume backed rebound from the current range can present buying opportunities for investors for the short term.

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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