Daily Market Commentary

Nepse continues its sluggish run

Published On: January 31, 2019 10:22 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 31: Trading turned choppy on Wednesday as the Nepal Stock Exchange (Nepse) continued to show lack of direction. The market has restrained between a narrow ranges of 1,160 to 1,170 points for an eighth straight session.

The benchmark index, which had added 4 points by midday, pared all its gains to close marginally lower. Nepse ended Wednesday's trading 0.4 points lower at 1160.59 points. Daily turnover also followed the broader market as only Rs 192 million worth of shares were traded in the bourse on Wednesday.

The sub-indices of Trading and Microfinance sectors logged gains of 0.75 percent and 0.37 percent, respectively. Similarly, Hotels, 'Others' and Banking segments followed suit with their sub-indices closing slightly higher. On the other hand, Manufacturing & Processing sectors came under pressure as reflected by a 3.08 percent drop in its sub-index. Furthermore, Finance, Development Bank, Hydropower, Non- Life Insurance and Life insurance sub-indices also ended the day in the negative territory.

Citizen Investment Trust recorded the highest turnover in Wednesday's bland session. More than Rs 23 million worth of shares of the company changed hands on the day. Next on the list was Upper Tamakoshi Hydropower Ltd which posted transactions of over Rs 13 million. Among commercial banks, NIC Asia Bank Ltd, Prime Commercial Bank Ltd and Nepal Investment Bank Ltd posted turnovers of over Rs 9 million, Rs 8 million and Rs 5 million, respectively.

Unnati Microfinance Bittiya Sanstha Ltd and Samudayik Laghubitta Bittiya Sanstha Ltd led the list of gaining stocks, as their respective share prices went up by 7.14 percent and 6.88 percent. Likewise, share prices of Salt Trading Corporation, Sagarmatha Insurance Co Ltd, United Insurance Co (Nepal) Ltd and Global IME Laghubitta Bittiya Sanstha Ltd appreciated by over 3 percent each.

City Express Finance Co Ltd was the biggest loser of the day. Share price of the Class 'C' financial institution fell by more than 7 percent. Similarly, Unilever Nepal Ltd and Tinau Development Bank Ltd saw their share prices go down by 4.87 percent each. Besides, shares of Gurkhas Finance Ltd and Miteri Development Bank Ltd registered loss of over 3 percent each.

Among companies publishing their earnings report for the second quarter of Fiscal Year 2018/19, Nabil Bank Limited has reported 18.45 percent growth in net profit year-on-year. Its net profit stands to Rs.2.17 billion against Rs 1.83 billion in the corresponding quarter last year. Likewise, Sunrise Bank Ltd and Sanima Bank Ltd have reported an increment of 33.74 percent and 18.25 percent, respectively, in their net profits. Muktinath Bikas Bank Ltd posted a substantial net profit growth of 53.12 percent in the second quarter of FY2018/19. Among microfinance companies, Rural Microfinance Development Center Ltd reported a significant growth in its earnings. The microfinance company's net profit grew to Rs 146 million against Rs 112 million in the same quarter previous year.

ARKS technical analysis indicates a bearish candlestick formation in the daily timeframe. Similarly, low market activity and all technical indicators suggest weak momentum in the market with the index lacking significant conviction at the current moment.

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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