daily market commentary

Nepse down as monetary policy fails to appease investors

July 13, 2018 07:32 AM Republica


KATHMANDU, July 13: The Nepal Stock Exchange (Nepse) index maintained a slightly positive bias during morning trading session on Thursday. However, stocks came under pressure mid-day and continued to decline throughout the remaining sessions. At the close, the index stood at 1,191.98 points -- a drop of 13.66 points, or 1.13 percent, compared to Wednesday. 

Investors seemed to look past the monetary policy announcement as its showed little impact to uphold the market sentiment. Turnover declined slightly to Rs 454 million on Thursday -- the last trading day of the week, compared to Rs 479 million on the previous day. Sensitive index, which measures the performance of Class ‘A’ stocks, also reflected the broader market with a decline of 1.15 percent. 

Most of the major sectors, except the Manufacturing & Processing sub-group which rose 0.13 percent, ended the day lower. Microfinance stocks witnessed substantial weakness as reflected by a 2.22 percent drop in its sub-index. Hotels Sub-index also fell over 2.08 percent on the day. Moreover, the sub-indices of Insurance, Hydropower, Development Bank, and Banking also closed lower.

Among active stocks, shares of Laxmi Bank Ltd logged in the highest turnover as the bank’s shares worth more than Rs 65 million changed hands on Thursday. Further, Kumari Bank Ltd Promoter Shares recorded total transaction s of more than Rs 43 million. NMB Microfinance Bittiya Sanstha Ltd, Kumari Bank Ltd, Janata Bank Nepal Ltd Promoter Share and Nepal Life Insurance Company Ltd were the other active stocks of the day.

Kanchan Development Bank Ltd led the list of advancing stock with a rise of about 9 percent. Further, Shares of Support Microfinance Bittiya Sanstha Ltd, Nepal Hydro Developers Ltd and NMB Microfinance Bittiya Sanstha Ltd followed suit, gaining over 6 percent each. On the contrary, stocks of Nagbeli Laghubitta Bikas Bank Ltd were under pressure on Thursday as its share price dropped around 7 percent. Kisan Microfinance Bittiya Sanstha Ltd, Radhi Bidhyut Company Ltd, Vijaya Laghubitta Bittiya Sanstha Ltd and NLG Insurance Company Ltd were the other losing stocks for the day as their prices slumped over 5 percent each.

On news and announcements, Everest Insurance Company Ltd is launching 105 percent rights issue for its promoter shareholders. It has sought the approval of Securities Board of Nepal (Sebon) for the issue. Butwal Power Company Ltd has distributed 20 percent cash dividend to its shareholders.

ARKS technical analysis model indicates the market extending losses for the fifth consecutive day with another bearish candlestick formation. With Thursday’s decline, the benchmark index has now fallen below the support level of 1,200 points with immediate support around 1,160-1,170 points mark. Other momentum indicators like Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) suggests that the market is yet to show any significant sign of recovery.

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