Daily market commentary

Nepse ends lower following broad decline

Published On: May 27, 2019 05:00 AM NPT

KATHMANDU, May 27: The benchmark Nepal Stock Exchange (Nepse) index traded flat initially but maintained negative bias throughout Sunday's trading session. The index dipped below 1,310 points at midday. After a failed attempt to make recovery in the afternoon, the index faltered further to close the day 11.93 points down at 1,302.61 points.

With budget speech for new fiscal year around the corner, the market opened on a slightly weaker note as investors seemed reluctant to take any major long positions. Hence, the day was marked by a broad decline. Subsequently, market participation dropped on the day with a turnover of Rs 626 million only.

Hydropower stocks struggled the most as the group's sub-index tanked 2.4 percent. 'Others' sector also witnessed losses with the group's sub-index falling down by 1.53 percent. Similarly, Hotels sub-index registered a loss of 1.49 percent. Shares of banking and financial institutions followed suit. Sub-indices of Development Bank, Finance and Banking groups posted a decline of 0.92 percent, 0.87 percent and 0.82 percent, respectively. Besides, all other sectors closed the day marginally lower.

Nepal Bank Ltd and Shivam Cements Ltd were the most active stocks of the day. While former saw a total turnover of Rs 48 million, the latter saw Rs 47 million worth of shares traded on the day. Shares of Upper Tamakoshi Hydropower Ltd were also actively traded as reflected by turnover of Rs 37 million. Himalayan Distillery Ltd, Agriculture Development Bank Ltd and Nepal Credit and Commerce Bank Ltd were among other active stocks of the day.

Microfinance stocks, including Global IME Laghubitta Bittiya Sanstha Ltd and NMB Microfinance Bittiya Sanstha Ltd, led the list of gainers. Share prices of the micro finance institutions rallied by 10 percent and 8.58 percent, respectively. United Insurance Company Ltd, Himalayan Urja Bikas Company Ltd and Mountain Hydro Nepal Ltd also saw their share price close 3 percent higher each. Share price of Shivam Cements Ltd was also up by over 2 percent.

Share price of Joshi Hydropower Development Company Ltd, on the other hand, tanked to hit the lower circuit of 10 percent. Himalayan Distillery Ltd also saw its share price tumble by 7.90 percent. The manufacturing company announced interim cash dividend of Rs 68.42 per share on Friday. The company has set ex-dividend date as June 1. Hence, only shareholders holding shares till May 31 will be entitled to the payout.

Energy stocks followed suit with share prices of Radhi Bidyut Company Ltd and Arun Kabeli Power Ltd falling by over 6 percent each. Other declining securities include Multipurpose Finance Co. Ltd, Ghalemdi Hydro Ltd and Gurkhas Finance Ltd.

ARKS technical analysis indicates the market forming a bearish candlestick formation on the daily timeframe. Despite the loss, volume has remained low, signaling lack of any major momentum behind the decline. Further, the index has held ground above 1,300 points as range-bound trading continues. A dip below 1,300 points might indicate further downfall, else further sideways movement can be expected.

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