daily market commentary

Nepse extends losing run

Published On: August 23, 2018 09:04 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 23: Stocks remained under pressure throughout Wednesday as the benchmark Nepal Stock Exchange (Nepse) index maintained a negative bias for most of the trading session. After dropping slightly in the first trading hour, the index lost a marginal 1.47 points in a choppy trade to close at 1,182.42 points. 

Investors were not active on the day as the market failed to show signs of sustainable surge seen in the previous week. As a result, the turnover continued to decline to one of its lowest levels. Only Rs 169 million worth of shares were traded on the day.

On sectoral front, sub-indices logged mixed performance with minimal movements. Strength was visible among Hydropower stocks, as its sub-index went up by 0.7 percent. Besides, only Finance and Manufacturing & Processing sub-indices closed the day in green, adding 0.2 percent and 0.1 percent, respectively. Life Insurance stocks lost the most as its sub-index fell by 1 percent. 'Others' sub-index shed 0.3 percent. Banking sub-index also closed marginally lower.

Market participation was led by stocks of Swabalamban Laghubitta Bittiya Sanstha Ltd which registered a turnover of over Rs 14 million. Banking stocks followed suit, as shares of Civil bank Ltd and Nepal Investment Bank Ltd posted total transactions worth Rs 12 million and Rs 8 million, respectively. Shares of Nepal Life Insurance Company Ltd continued to trade actively, recording total turnover of Rs 6 million on the day. 

Gurkhas Finance Ltd was the biggest gainer of the day, as its share price went up by 3.81 percent. Correspondingly, stocks of Agriculture Development Bank Ltd and Sahayogi Bikas Bank Ltd added over 3 percent each. The other advances of the day include RMDC Laghubitta Bittiya Sanstha Ltd, Ngadi Group Power Ltd and Bottlers Nepal (Terai) Ltd which went up by 2 percent each.

On the contrary, shares of World Merchant Banking and Finance Ltd turned in the worst performance as it dropped 3.92 percent to close at Rs 98 per unit. Unit price of NMB Hybrid Fund L-1 also closed over 3 percent lower. Further, shares of Lumbini General Insurance Company Ltd sank tanked over 2.88 percent. Barun Hydropower Company Ltd, Mahalaxmi Bikas Bank Ltd and Prabhu Insurance Ltd were the other losing stocks. 

On news, NIC Asia Bank Ltd is issuing 7-year debentures worth Rs 1.83 billion, yielding 11 percent. The issue was approved by Securities Board of Nepal (Sebon) on Tuesday. While 80 percent of the corresponding issue will be floated to private institutions, 20 percent will be issued to general public.

As per the ARKS technical analysis, the index formed a small bearish candle, reflecting the marginal loss witnessed in the bourse on Wednesday. Even though the selling pressure has somewhat eased compared to recent sessions, the market is yet to derail the downtrend on a sustainable basis. The market has closed just above the 1,180-point support level where a small bounce can be expected. However, for a strong uptrend to follow, the index must breakout from the current consolidation range of 1,180 to 1,200 points with substantial market activity.

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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