Nepse down despite improved turnover

Published On: November 8, 2019 05:15 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 8: Stocks kicked off trading on an upbeat note on Thursday as the Nepal Stock Exchange (Nepse) index traded in green in the morning.

However, the secondary market succumbed to selling pressure in the remaining trading hours, witnessing a steady decline to eventually close the day 6-05 points lower at 1,131.97 points.Bears remain slightly dominant in the present context with the market logging losses for third straight day. The market is also yet to make any significant move outside the confined range of 1,130-1,150 points. Hence, the market is still trending sideways with no clear direction visible.

Turnover improved on the day, partially due to recommencement of trading of NMB Bank Ltd, formed after its merger with Om Development Bank Ltd. Trading of shares of both the institutions was halted from mid-May following the merger agreement. The local bourse witnessed total turnover of over Rs 374 million.

Trading group continued to outperform other groups on the back of extended rally witnessed by Salt Trading Corporation. The group's sub-index jumped by 6.18%. Mutual Fund and Non-Life Insurance segments also saw their respective sub-indices go up by 0.38% and 0.29%. Besides, all other sub-groups closed the day in red. Leading the pack was Hotels sector which witnessed a drop of 1.45 %. Next, Life Insurance and Hydropower sub-indices fell by 0.79% and 0.76%, respectively. Banking stocks also slid slightly.

The heavyweight segment's sub-index was down by 0.64%. All other sectors saw modest losses.Among actives stocks, NMB Bank Ltd resumed its post-merger trading with the biggest turnover of over Rs 112 million on Thursday. Shares of Prabhu Bank Ltd and Nepal Bank Ltd were also actively traded as reflected by turnovers of Rs 56 million and Rs 28 million, respectively. Meanwhile, Nabil Bank Ltd and Prabhu Bank Ltd Promoter Shares logged transactions of over Rs 17 million and Rs 15 million, respectively.

Salt Trading Corporation led the list of advances as its share price rallied to hit the upper circuit of 10%. Second on the list was NIC Asia Growth Fund was its unit price rose by almost 4%. Sagarmatha Insurance Co Ltd and National Hydropower Company Ltd followed suit adding over 3% each on their share prices. Other top gainers of the day include Rairang Hydropower Development Company Ltd, Janautthan Samudayik Laghubitta Bikas Bank Ltd and Radhi Bidyut Company Ltd which saw their share prices go up by over 2% each.

On the other hand, Ridi Hydropower Development Company Ltd witnessed the biggest loss of the day as its share price tanked 5.19%. Subsequently, share prices of Oriental Hotels Ltd and Synergy Power Development Ltd were also down by at least 4% each. Khanikhola Hydropower Co Ltd, Nepal Investment Bank Ltd Promoter Share and Hydroelectricity Investment and Development Company Ltd were among other major losers of the day.

In corporate space, Civil Bank Ltd has announced dividend for FY2018/19. The Class 'A' bank has declared 6.57% cash dividend to its shareholders – up from 4.05% cash dividend distributed in the previous fiscal year. Among companies publishing financial results, Mero Microfinance Laghubitta Bittiya Sanstha Ltd has reported 55.92% year-on-year growth in its first quarter earnings. Its net profit stands at over Rs 42.73 million. Similarly, Aarambha Microfinance Bittiya Sanstha Ltd reported net profit of Rs 3.22 million – a decent improvement from a net loss of almost Rs 1 million in the corresponding quarter previous year.

The index, as per the ARKS technical analysis, formed a third bearish candlestick in a row as bears are slightly dominant in the present context. With the consecutive losses, albeit small, technical indicators also suggest the market losing momentum, making further consolidation and range bound trading likely in the coming sessions. However, the 1100-point level has historically held ground as a significant support making any notable downfall improbable. Investors looking to take long positions can enter the market if it breaches the 1,150-point resistance.

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