Daily market commentary

Nepse drops for third straight session

Published On: August 6, 2019 05:30 AM NPT By: Republica


KATHMANDU, Aug 6: After trading flat for the first trading hour on Monday, the Nepal Stock Exchange (Nepse) index came under some pressure in the remaining session. A steady decline, beginning mid-day, saw the index close the day 4.55 points lower. Nepse index ended the day at 1,255.09 points.

With Monday's loss, the index has witnessed modest drops for three straight sessions. Range bound trading has continued as investors have kept from taking major positions in the bourse. Nonetheless, sellers have remained relatively active in the last couple of sessions. Turnover remained modest as only Rs 443 million worth of share changed hands.

Most of the sectors closed the day in red. Only Mutual Fund and Non-Life Insurance sub-indices advanced in the session. Maximum losses came from microfinance scrips. After closing in green for five straight sessions, microfinance sub-index retraced 1.72 percent in the day. Subsequently, Manufacturing & Processing and Finance sub-indices registered losses of 0.61 percent and 0.56 percent. All other sectors saw marginal losses.

Among actives, shares of Nepal Bank Ltd was traded the most with a turnover of Rs 27 million. Agriculture Development Bank Ltd and Nepal Credit and Commerce Bank Ltd followed with transactions worth Rs 19 million and Rs 17 million, respectively. Chhimek Laghubitta Bittiya Sanstha Ltd, NIC Asia Bank Ltd and Shivam Cements Ltd's shares were also actively traded with turnovers of over Rs 16 million each.

Swabhimaan Laghubitta Bittiya Sanstha Ltd stretched its gains further. Its share price jumped 4 percent. Next, Reliance Finance Ltd climbed 3.33 percent higher. Furthermore, NMB Hybrid Fund L-1 and Union Power Company Ltd posted gains of over 2 percent apiece. Everest Insurance Company Ltd, Shree Investment Finance Co. Ltd and NLG Insurance Company Ltd were among other top gaining scrips.

Microfinance stocks dominated the list of decliners. Most of the microfinance share prices corrected following substantial rally seen in the recent sessions. Sparsha Laghubitta Bittiya Sanstha Ltd, Support Microfinance Bittiya Sanstha Ltd and Gurans Laghubitta Bittiya Sanstha Ltd were the major losers tumbling over 9 percent each. Mithila Laghubitta Bittiya Sanstha Ltd lost over 8 percent, while Infinity Laghubitta Bittiya Sanstha Ltd and Nepal Seva Laghubitta Bittiya Sanstha Ltd dropped more than 7 percent each. Other microfinance scrips followed suit.

Among companies publishing fourth quarter reports, Kumari Bank Ltd saw its net profit grow by 28 percent year-on-year to 1,334 million. Similarly, net profit of ICFC Finance Ltd surged by over 40 percent. Its net profit stands at 139 million. Swabalamban Laghubitta Bittiya Sanstha Ltd also reported decent growth in its earnings. Its net profit grew by 23 percent to Rs 422 million.

ARKS technical analysis indicates the market forming a third bearish candlestick as bears have remained slightly dominant of late. Both Moving Average Convergence Divergence (MACD) and relative Strength Index (RSI) show market coming under pressure. Nonetheless, the market is trading above its immediate support zone of 1,240-1,250 points. Only a breach of the aforementioned support level will make further downfall likely.

This column is produced by ARKS Capital Advisors Ltd

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

www.arkscapitaladvisors.com


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