Daily Market Commentary

Nepse drops to 52-week low

Published On: December 6, 2018 05:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 6: Stocks came under significant pressure since the very beginning of Wednesday's session. As a result, the benchmark Nepal Stock Exchange (Nepse) index fell 17 points by mid-session. Despite the selling pressure easing off later, Nepse closed the day 22.80 points lower at 1,118.19 points.

The market, which showed signs of recovery in the past few sessions, returned back to its losing ways, dropping to a 52-week low. The skepticism among investors can be attributed to rising interest rates worries and credit crunch witnessed in the financial space of late. The bourse posted a modest turnover of over Rs 377 million.

All major trading groups logged loss on the day. Stocks of 'Others' group was the major drag as the group's sub-index tanked 3.77 percent. Non-life Insurance stocks also posted a significant move to the downside with a 3.64 percent decline in its sub-index. Microfinance and Development Bank's sub-indices followed suit with a drop of over 2 percent each. Besides, sub-indices of Life Insurance and Hydropower scrips shed 1.9 percent and 1.81 percent, respectively. The heavyweight Banking sub-index also lost 1.52 percent on the day.

Shares of Nepal Bank Ltd continued to trade actively in the bourse. More than Rs 35 million worth of the bank's shares changed hands on the day. Similarly, Rs 28 million worth of shares of Global IME Bank were traded on the penultimate trading day of the week. Likewise, Mirmire Microfinance Development Bank Ltd Promoter Share and NMB Bank Ltd registered turnover of over Rs 25 million and Rs 23 million, respectively. Nabil Bank Ltd Promoter Share, NIC Asia Bank Ltd and Sanima Bank Ltd were the other active scrips on Wednesday.

In terms of advances, Hathway Finance Company Ltd bucked the trend and posted gains of 5.77 percent. Besides, share prices of Dibyashwori Hydropower Ltd and Tinau Development Bank Ltd climbed up by 3.23 percent and 2.35 percent, respectively. Kalika Power Company Ltd and City Express Finance Company Ltd were the other top gaining stocks of the day with gains of 1.94 percent and 1.83 percent, respectively.

Radhi Bidyut Company Ltd, on the other hand, was the worst performer of the day. They hydropower company's share price slumped 6.89 percent. Share prices of Himalayan Distillery Ltd and Support Microfinance Bittiya Sanstha followed suit and fell by 5.7 percent each. Meanwhile, Kalika Laghubitta Bittiya Sanstha Ltd, National Hydropower Company Ltd and Nerude Laghubitta Bikas Bank Ltd shed over 5 percent each.

On news front, Chautari Laghubitta Bittiya Sanstha Ltd launched its Initial Public Offering (IPO) from Wednesday. The issue, which is worth Rs 60 million, will close on December 9. In the meantime, Joshi Hydropower Development Company Ltd closed its 1.69 million units of public issue on the day.

As per the ARKS technical analysis, the market has further stretched its losing streak with a bearish candlestick formation. Technical indicators also suggest that the equity market is in significant control of the bears at the moment. The next support lies at the psychological level of 1,100 points.

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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