Daily market commentary

Nepse ends lower for third straight session after broad sell-off

Published On: August 27, 2019 02:25 AM NPT By: Republica

KATHMANDU, Aug 27: Local stocks continue to tumble as the bourse remained under pressure for most of the trading session on Monday. The Nepal Stock Exchange (Nepse) index fell since the beginning of the initial trading hour to trade briefly below 1,200 points mark in the afternoon.

The benchmark index saw some recovery thereafter but continued to trade in the red before closing the day with a loss of 6.49 points at 1,203.13 points.

Following the day's loss, the index fell for a third straight session stretching August's decline to over 60 points.

Considerable weakness is visible in the equity market as the index has continued to make fresh lows. On a positive note, the index has maintained its ground above the crucial 1,200 psychological mark. Hence, the movement in the coming sessions will likely suggest a possible course of the equity market. A sub-par turnover of Rs. 380 million was recorded in the session.

All major sectors turned red following the broader market. Hit hard by the broad slump was the life insurance segment. The group's sub-index fell 1.2 percent. Manufacturing & Processing and Hydropower sub-indices, subsequently, shed 0.88 percent and 0.86 percent. Next, Hotels sub-index registered a 0.71 percent decline. All other sub-indices closed lower.

Prabhu Bank Ltd Promoter Shares were traded the most with a turnover of over RS. 102 million. Commercial bank scrips followed suit as Nabil Bank Ltd, Nepal Bank Ltd and NIC Asia Bank Ltd registered turnovers of Rs. 18 million, Rs. 16 million and RS. 13 million, respectively. Nepal Life Insurance Company Ltd, Rasuwagadhi Hydropower Company Ltd and Sanima Bank Ltd were also actively traded on Monday.

On the gainers front, Salt Trading Corporation led the list of advances. Its share price shot up by 4.87 percent. Mero Microfinance Bittiya Sanstha Ltd also rallied over 4 percent after the micro-finance declared 30 percent stock dividend to its shareholders. Adhikhola Laghubitta Bittiya Sanstha Ltd also climbed 3.8 percent on its opening trading day. Furthermore, Karnali Development Bank Ltd and Sabaiko Laghubitta Bittiya Sanstha Ltd witnessed gains of over 3 percent each.

In contrast, NLG Insurance Ltd was the worst performer of the day as its share price tanked over 6 percent. Ankhu Khola Jalvidhyut Company Ltd and NIBL Pragati Fund also struggled as both securities gave up more than 5 percent. Correspondingly, Shrijana Finance Ltd, World Merchant Banking & Finance Ltd and Rasuwagadhi Hydropower Company Ltd posted losses of over 4 percent apiece.

In the news, ICFC Finance Ltd is set to issue debenture worth Rs 200 million, becoming the first among its counterparts to issue debt security in the capital market. Global IME Capital Ltd will be heading the issuance which will pay 12 percent semi-annually till its maturity period of 7 years.

As per the ARKS technical analysis, the market failed to sustain the reversal signal despite a hammer candlestick on the prior session. Formation of another bearish candle indicates dominance of bears still persisting in the bourse. Nonetheless, the market is in the support zone at around 1,200 points where a rebound can be expected. Else, a breach of the support zone will indicate downtrend continuation.

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)

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