weekly market commentary

Nepse ends lower paring previous day’s gains

Published On: October 27, 2018 08:23 AM NPT

KATHMANDU, Oct 27: Weakness prevailed throughout the entire trading session on the last trading day of the week. Subsequently, stocks witnessed continuous decline with the benchmark Nepal Stock Exchange (Nepse) index ending firmly lower on the day. The index closed at 1,241.11 points, down 8.82 points or 0.71 percent compared to the session earlier. 

Nepse trimmed all its previous day’s gains with the drop experienced in the day. Hence, range bound trading has remained intact on the back of indecisiveness among investors and traders. On a positive note, market activity has shown gradual improvement in the recent sessions. Over Rs 277 million worth of shares were exchanged on the day.

All major sub-indices, baring the Manufacturing & Processing sub-index, closed the day lower. Hotels sector, which witnessed significant move to the upside in the preceding session, shed almost 2 percent on the day. ‘Others’ sub-index also fell notably posting a loss of 1.23 percent. Further, sub-indices of Banking, Hydropower and Non-Life Insurance dropped 0.85 percent, 0.81 percent and 0.7 percent, respectively. 

Market participation remained dominated by commercial bank scrips. Shares of Prabhu Bank Ltd continued to trade actively as more than Rs. 36 million worth of the bank’s scrips were traded on Thursday. Next, Kumari Bank Ltd posted a turnover of over Rs 26 million while NIC Asia Bank Ltd logged in a total transaction of over Rs 11 million. Besides, Siddhartha Bank Ltd, Janata Bank Nepal Ltd and Machhapuchhre Bank Ltd’s scrips registered turnovers of over Rs 9 million, respectively. 

Chhyangdi Hydropower Ltd turned in some of the best performance of the day as its share price jumped 6.25 percent. Similarly, Kankai Bikas Bank Ltd and Unilever Nepal Ltd rose over 4 percent each. Shares of other hydro sector companies, including Himalayan Power Partner Ltd and Kalika Power Company Ltd, added over 3 percent apiece. 

On the losing front, major weakness was visible among shares of Barun Hydropower Company Ltd and Rairang Hydropower Development Company Ltd with their respective share prices skidding 6.4 percent and 5.47 percent. Further, Samata Microfinance Bittiya Sanstha Ltd slid almost 4 percent. Rastriya Beema Company Ltd Promoter Share, Arun Kabeli Power Ltd and Sanima Equity Fund were among other losing securities. 

Among the companies publishing their first quarterly financials of the Fiscal Year 2018/19 on the day, Kanchan Development Bank Ltd and Miteri Development Bank Ltd reported a year-on-year growth in their respective net profits. While the former’s net profit grew by over 19 percent, the latter saw its net profit rise 10 percent. Similarly, National Microfinance Bittiya Sanstha Ltd’s first quarter’s net profit increased by 34.22 percent as compared to the preceding year.  

As per the arks technical analysis, the index formed a bearish candlestick on the daily timeframe. Consequently, the index has continued its range bound trading as it has closed between 1,240 and 1,250 points in the last seven sessions. Hence, the market lacks conviction in the present context where a breakout form the current range can suggest a possible direction for the equity market in the short run.

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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