KATHMANDU: The benchmark Nepal Stock Exchange (Nepse) index struggled throughout Sunday’s trading session. The index fell sharply in the initial trading hours and shed more than 14 points by mid-session. Though the selling pressure eased slightly in the final trading hours, Nepse still posted a notable loss of 17.31 points to close the day at 1,205.22 points.
The official website of Nepse remained affected by technical problem on the second day since the start of online trading platform. As investors failed to get crucial market depth information through the website, the bourse witnessed significantly passive trading activity on the day. Only Rs 99 million worth of shares were exchanged on Sunday.
Out of the nine traded sectors, only Finance and ‘Others’ stocks managed to eke out marginal gains. Banks were the biggest contributors to the day’s broad slump as the group’s sub-index tanked 2.32 percent. The rout in banking stocks comes as a result of comparatively low dividend announcements by major banks of late. Further, Hydropower and Non-Life Insurance sub-indices also shed 1.02 percent and 0.77 percent respectively. All other sub-indices closed lower.
Among the active stocks, shares of Prabhu Bank Ltd were traded the most. Shares worth Rs 8.49 million of the Class ‘A’ bank were traded on the day. Nepal Bank Ltd and NIC Asia Bank followed suit with share transactions of over Rs 8 million each. Other commercial banking scrips including Standard Chartered Bank Ltd, Everest bank Ltd and Prime Commercial Bank Ltd were also actively traded on the day.
Primarily, Microfinance scrips dominated the list of advances with shares of Swadeshi Laghubitta Bittiya Sanstha Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, gaining over 3 percent apiece. Share price of Miteri Development Bank Ltd went up by 2.55 percent followed by other micro sector lenders. Share prices of both Kalika Laghubitta Bittiya Sanstha and Support Microfinance Bittiya Sanstha logged gains of 1.92 percent each.
On the contrary, Api Power Ltd was the worst performing stock of the day as its shares hit the lower circuit of 10 percent. Shares of Standard Chartered Bank also came under significant pressure after the bank announced cash dividend of 17.50 percent on Sunday. Its unit price plunged by 8.55 percent. Nepal Seva Laghubitta Bittiya Sanstha Ltd and Oriental Hotels Ltd also saw their respective share prices tumble by over 4 percent each. Arambha Microfinance Bittiya Sanstha Ltd share price also tanked 4.15 percent after the company posted a net loss of Rs 920,000 as per its financial report for the first quarter of Fiscal Year 2018/19.
Meanwhile, Nepal Rastra Bank (NRB) has given consent to acquisition of Om Development Bank Ltd by Prime Commercial Bank Ltd. As per NRB’s notice to Prime Commercial Bank Ltd, the bank can now initiate process for the acquisition.
ARKS technical analysis indicates the index forming a bearish candlestick on Sunday, wiping out all its gains from the two preceding sessions. Technical indicators also suggest that the bears are dominant in the current juncture, making further downfall likely.
The immediate support lies around the psychological level of around 1,200 points, the breach of which might see the Nepse hit 1,180 points zone.
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)