Daily Market Commentary

Nepse extends correction to second day

Published On: May 1, 2019 04:00 AM NPT By: Republica

KATHMANDU, May 1: Stocks opened higher in the morning but quickly gave up gains to trade in red in early trading on Tuesday. Subsequently, the benchmark Nepal Stock Exchange (Nepse) index came under pressure in the latter trading hours and hovered near 1,300 points. The index finally fell further and closed the day 11.70 points lower at 1,298.60 points.

Following the day's losses, Nepse has closed lower for a second consecutive day, as profit-booking continued in the secondary market. The drop was accompanied by a slight decrease in daily turnover. The bourse posted total transaction of Rs 950 million compared to Rs 1,197 million a day earlier.

On sectoral front, most of the sub-indices ended the day in red. Hydropower stocks bucked the trend as the group's sub-index rallied 3.82 percent. Finance sub-index also edged higher. On the losing front, Insurance stocks struggled as both Non-life and Life Insurance sub-indices were down by 3.43 percent and 2.85 percent, respectively. Further, Trading, Hotels and Microfinance sub-indices logged decline of over 1 percent each. All other sub-indices ended the day in red.

Nepal Life Insurance Company Ltd led the list of companied in terms of turnover ahead of its book closure for Annual General Meeting (AGM). Nepal Bank Ltd also registered turnover of over Rs 93 million. Similarly, shares worth Rs 37 million each of Upper Tamakoshi Hydropower Ltd and Kumari Bank Ltd were traded on the day. Sanima Mai Hydropower Ltd, Chhimek Laghubitta Bikas Bank Ltd and Chilime Hydropower Company Ltd were among other active stocks of the day.

Hydropower stocks dominated the list of advances. Sanima Mai Hydropower Ltd turned in the best performance on the day as its share price rallied to hit the upper circuit of 10 percent. Share price of Arun Valley Hydropower Development Co Ltd surged by over 9 percent. Other hydropower stocks followed suit as United Modi Hydropower Ltd, Rairang Hydropower Development Company Ltd and National Hydropower Company Ltd posted gains of 8.18 percent, 6.59 percent and 5.80 percent, respectively. Arun Kabeli Power Ltd, Himalayan Power Partner Ltd and NIBL Pragati Fund were among other top gainers of the day.

On the other hand, insurance stocks came under the hammer. Share price of Rastriya Beema Company Ltd went down by 5.89 percent followed by Asian Life Insurance Company Ltd which saw its share price take a dip of 4.9 percent. Share price of Janautthan Samudayik Laghubitta Bittiya Sanstha Ltd also closed 4.50 percent lower. Similarly, share prices of Nepal Insurance Co. Ltd, Global IME Laghubitta Bittiya Sanstha Ltd and Kisan Microfinance Bittiya Sanstha Ltd shed over 3 percent each.

In the news, Global IME Bank Ltd published its earnings report for the third quarter of FY2018/19, reporting a 32.58 percent year-on-year net profit growth to Rs 1.87 billion. Similarly, Sunrise Bank Ltd also saw its net profit grow by over 30 percent to Rs 1.23 million.

As per the ARKS technical analysis, the market formed a second bearish candlestick on the daily timeframe. Following the decline, technical indicators also indicate the momentum easing slightly in the present context. The index is now trending near the crucial 1,300-point mark where the index's movement is crucial to determine the plausible direction of the secondary market for the near term.

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