Daily market commentary

Nepse drops 16 points, extends losing run to eighth straight day

Published On: September 17, 2019 08:13 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 17: The Nepal Stock Exchange (Nepse) index fell below 1,140 points at the start of Monday's session and continued to see weakness throughout the day. The benchmark index wavered along 1,135 points mark in the afternoon but gave up notable ground in the closing hours to end the day 16.18 points lower at a 6-month low of 1,123.83 points.

Stocks continued to struggle as investors resorted to broad panic-selling with the index approaching its multi-year low of 1,100 points. Investors' sentiment continues to remain weak on the back of authorities failing to address the issues put forth by investors. In the meantime, Nepse has lost over 70 points in the eight-day slump. Stocks worth Rs 344 million traded in the local bourse on Monday. 
Except Trading sector, all other segments ended the day in red. 'Others' and Life Insurance stocks were the major laggards with their respective sub-indices giving up 2.6% each. Similarly, Non-life Insurance, Hydropower and Manufacturing & Processing sub-indices also suffered losing over 1% each. Decline among heavyweight banks also weighed on the broader index. Banking sub-index registered a 1.25% decline. All other segments ended the day in red. 

In terms of active stocks, Chhimek Laghubitta Bittiya Sanstha Ltd recorded the highest turnover on Monday. More than Rs 18 million worth of shares of the micro sector lender were traded on the day. Nepal Bank Ltd closely followed with turnover of over Rs 17 million, while Citizens Bank Internatioal Ltd saw Rs 14 million worth of shares traded. NIC Asia Bank Ltd, Siddhartha Bank Ltd and Nepal Life Insurance Co Ltd were among other active stocks with turnovers of Rs 11 million each. 

Among advances, Salt Trading Corporation continued to outperform other listed companies as its share price was up by 4% on Monday. Secondly, share price of NMB Microfinance Bittiya Sanstha Ltd shot up by 3%. Subsequently, Chhyangdi Hydropower Ltd, Ganapati Microfinance Bittiya Sanstha Ltd and Shrijana Finance Ltd also registered gains of 2% each.

National Life Insurance Company Ltd, on the other hand, logged the worst performance of the day as its share price tanked by over 7%. Synergy Power Development Ltd also struggled as its share price was traded over 6% lower. Insurance scrips followed suit with IME General Insurance Ltd and NLG Insurance Company Ltd losing 5.73% and 5.67%, respectively. Further, share prices of Union Hydropower Ltd, Lumbini General Insurance Co Ltd and Prime Life Insurance Company Ltd also tumbled by over 5% each. 

In corporate space, newly-listed Sabaiko Laghubitta Bittiya Sanstha Ltd has announced its dividend for FY2018/19. As per its notice to Nepse, the micro lender's shareholders will be entitled to 13% bonus shares. The decision, however, is subject to approval from upcoming annual general meeting (AGM) of the company. 

As per ARKS technical analysis, the market formed a bearish candlestick on the day extending losses to eighth straight session. With bearish sentiment dominating the market, Relative Strength Index (RSI) has dipped further in the oversold zone and Moving Average Convergence Divergence Line (MACD) has stretched its south bound movement with no apparent sign of reversal. A strong support lies at around 1,100 points. Hence, investors are suggested to closely monitor the movement of the index in the coming sessions which can suggest a likely course of the secondary market.

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