KATHMANDU, May 31: The stock market witnessed a volatile trading session on Wednesday as the benchmark Nepal Stock Exchange (Nepse) index swung between gains and losses to end the day on a negative note. The index lost 4.94 points to close at 1,322.27 with a turnover of Rs. 439 million.
The stocks suffered slightly as the federal budget announcement on Wednesday failed to provide any significant catalyst to the market. As per the budget, capital gains tax (CGT) in the secondary market for individual investors has been increased to 7.5 percent while the rate for institutional investors stands at 10 percent. On a positive note, the government will not be levying any taxes on broker commission.
Furthermore, any real sector companies with capital more than Rs 1 billion will have to get listed on the stock exchange in due course of time.
Mixed performance was seen during trading sessions on Wednesday. Trading Sub-Index was the worst performer as it lost 2.28 percent. Banking Sub-Index also slipped 0.67 percent. Meanwhile, microfinance sector outperformed the market with Microfinance Sub-Index rising by 0.25 percent. Finance and Insurance Sub-Indices also ended the day higher.
In terms of turnover, stocks of Sana Kisan Bikas Bank Ltd were in high demand on the day as Rs 44 million worth of shares of the company changed hands. Second on the list was Sanima Mai Hydropower Ltd which recorded a turnover of Rs 22 million. Similarly, shares of non-life insurance companies including Premier Insurance Company Ltd, Nepal Insurance Company Ltd, Prudential Insurance Company Ltd and Shikhar Insurance Company Ltd were also in high demand.
Shares of Unnati Microfinance Bittiya Sanstha Ltd and Naya Nepal Laghubitta Bikas Bank Ltd rose the highest as share price of both the companies surged by almost 4 percent. Sana Kisan Bikas Bank Ltd also saw its shares price increase by 3.81 percent. On the other hand, shares of Mega Bank Ltd continued to tumble, losing almost 10 percent on the day. Shares of Sahayogi Bikas Bank Ltd and Saptakoshi development Bank Ltd both dipped over 4 percent.
On Wednesday, Womi Microfinance launched its 30 percent rights issue. The microfinance company will be issuing over 233,000 units of shares to its shareholders. Further, Western Development Bank Ltd is holding its annual general meeting (AGM) on June 27. Distribution of 17.41 percent bonus shares is the main agenda for the meeting.
As per ARKS technical analysis, the index formed another bearish candlestick as it extended losses having failed to cross the 1,400-piont level on the day. Hence, the market appears to turn range bound.
Relative Strength Index (RSI) lies flat near the mid zone. Moving Average Convergence/Divergence (MACD) also reflects similar picture, suggesting sideways trend continuing. Therefore, the market currently is experiencing a lack of momentum.