Daily Market Commentary

Nepse ends flat as stocks take a breather

Published On: January 23, 2019 09:07 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Weakness carried over from the previous day to the beginning of Tuesday's session as the Nepal Stock Exchange (Nepse) index shed over 5 points in the initial trading hour on Tuesday. The index recouped all its initial losses to trade higher in the afternoon and closed 0.78 points higher to close at 1,168.83 points. 

Following four-day losing streak, the selling pressure eased off slightly in the local bourse. Nonetheless, the bourse has continued to post bland trading sessions amid lack of any significant news or events in the financial space. Total turnover for the day stood at Rs 292 million. 

Most of the sub-indices closed the day in green following the broad Nepse index. Only Manufacturing & Processing, Hydropower and Finance sub-indices closed lower. Microfinance and Life Insurance stocks, on the other hand, saw considerable strength as the group's sub-indices climbed up by 1.25 percent and 1.11 percent, respectively. Hotels sub-index also appreciated by 0.87 percent on the day. Sub-indices of 'Others', Development Bank and Banking segments also eked out meager gains on the day. 

Shares of Upper Tamakoshi Hydropower Ltd continued to trade actively in the secondary market as more than Rs 54 million worth of its shares changed hands. Machhapuchhre Bank Ltd and Citizens Investment Trust followed suit with total transactions of over Rs 16 million each. Meanwhile, Nepal Bank Ltd registered total turnover of over Rs 10 million. Besides, Prabhu Bank Ltd, Chhimek Laghubitta Bikas Bank Ltd and NMB Bank Ltd registered turnover of Rs 9 million each.

Samata Microfinance Bittiya Sanstha Ltd led the list of gaining stocks as it added 3.51 percent on its share prices. Life Insurance Co Nepal, Nagbeli Laghubitta Bikas Bank Ltd and National Hydropower Company Ltd, likewise, saw their respective share prices rise by over 3 percent apiece. Civil Laghubitta Bittiya Sanstha Ltd and Shree Investment Finance Co. Ltd were among other top gainers of the day with advances of 2.99 percent each.

Conversely, Shares of Kanchan Development Bank Ltd saw the biggest loss of the day. Its share price dipped to hit the lower circuit of 10 percent. Similarly, Nepal Hydro Developers Ltd also tanked 9.65 percent. Unilever Nepal Ltd followed suit. The FMCG manufacturer saw its share price tank over 7 percent. Further, microfinance stocks, including Janautthan Samudayik Laghubitta Bikas Bank Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, registered loss of over 3 percent each.

Among companies publishing earnings report for the second quarter of Fiscal Year 2018/19, Kumari Bank Ltd reported a year-on-year net profit growth of almost 30 percent. Its net profit stands at Rs 676 million. United Finance Ltd also reported significant growth in its earnings. The finance company's net profit grew to Rs 33 million against Rs 10 million in the previous year.

ARKS technical analysis indicates a doji candlestick formation on a daily timeframe reflecting indecisiveness witnessed in the day's session. Despite the index ending its losing run, technical indicators suggest that the sentiment still remains bearish in the current juncture. The index is trending in a support zone where the next breakout in either direction might suggest possible future movement. Investors are, hence, suggested to take a watchful stance in the present context.

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

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