Daily Market Commentary

Nepse down 4 points

Published On: January 30, 2019 04:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 30: Stocks maintained negative bias throughout Tuesday's session. The secondary market came under pressure since the starting of Tuesday's trading, as the Nepal Stock Exchange (Nepse) shed than 4 points by mid-session. Eventually, the benchmark index closed 3.89 points lower at 1160.99 points.

Daily turnover also followed the broader market. A total of Rs 308 million worth of shares were traded in the bourse on Tuesday.

Most of the major sub-indices ended the day in red. Only Manufacturing & Processing, Finance and 'Others' sub-indices gained values. On the flip side, Hydropower and Non-Life Insurance sectors recorded loss of 1.12 percent and 1.06 percent, respectively. Furthermore, Microfinance, Banking, Life Insurance, Development Bank and Hotels sub-indices also closed slightly lower.

Prabhu Bank Ltd Promoter Shares led the list of companies in terms advances, recording turnover of over Rs 35 million. Next on the list was Upper Tamakoshi Hydropower Ltd which saw Rs 24 million worth of shares traded. Furthermore, Chhimek Laghubitta Bittiya Sanstha Ltd and Citizen Investment Trust recorded total transactions of over Rs 16 million and Rs 14 million, respectively. Similarly, Nepal Insurance Co Ltd, NIC Asia Bank Ltd, Nepal Bank Ltd and Nepal Credit & Commercial Bank Ltd were the other active stocks of the day.

Samudayik Laghubitta Bittiya Sanstha Ltd added 5 percent on its share price on Tuesday. Similarly, Support Microfinance Bittiya Sanstha Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd saw their share prices go up by 4.58 percent and 3.21 percent, respectively. Gurkhas Finance Ltd, Miteri Development Bank Ltd and Karnali Development Bank Ltd also added over 2 percent on their share prices, respectively.

On the other hand, Janautthan Samudayic Laghubitta Bikas Bank Ltd logged the worst performance of the day as its share price fell by more than 8 percent. The company has declared 20 percent bonus shares for its shareholders. The decision is subject to approval from the company's Annual General Meeting (AGM) and Nepal Rastra Bank. After adjustment of the bonus shares, the paid-up capital of the microfinance company will reach Rs 63.3 million. Likewise, share prices of Mithila Laghubitta Bittiya Sanstha Ltd, United Modi Hydropower Ltd and Joshi Hydropower Development Bank Ltd went down by over 4 percent each.

On earnings front, Kailash Bikas Bank Ltd reported a year-on-year net profit growth of 3 percent. As per its financials for the second quarter of FY2018/19, its net profit stands at over Rs 274 million. Among commercial banks, Nepal Investment Bank Ltd posted net profit growth of 7.93 percent year-on-year to Rs 1.97 billion in the second quarter.

Nepal Rastra Bank (NRB) has fixed a new paid-up capital requirement of Rs 1.2 billion for regional development bank which are operating in up to three districts. They will have to meet the new capital requirements by mid-July, 2020.

As per the ARKS technical analysis, the market formed a bearish candlestick on the daily timeframe. Following the day's losses, technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have slid downward, suggesting bears taking over in the present context. Hence, cautious trading is suggested in the forthcoming session.

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