Daily Market Commentary

Nepse extends losing streak to Day 4

Published On: January 22, 2019 03:30 AM NPT

KATHMANDU, Jan 22: Stocks struggled throughout the trading session on Monday. The Nepal Stock Exchange (Nepse) index began its slump since the initial trading hour and saw constant pressure throughout the remaining session. The index closed the day firmly lower at 1,168.06 points, registering a daily loss of 10.86 points.

Following the day's decline, the local bourse extended its losses for four straight sessions. The market found some respite in the previous week driven by advances seen in share prices of Upper Tamakoshi Hydropower Ltd and Citizens Investment Trust Ltd. However, since both the stocks are witnessing substantial retracement of late, the index has returned back to losing ways. Other stocks also followed suit, contributing to the day's broad slump. Meanwhile, Nepse posted a turnover of Rs 367 million.

All traded sectors, except Finance, ended the day in red. Hydropower sub-index saw considerable weakness, thanks do drop in share prices of Upper Tamakoshi Hydropower Ltd. The index closed over 3 percent lower. Similarly, Microfinance and 'Others' sub-indices posted loss of 1.77 percent and 1.54 percent, respectively. Furthermore, sub-indices of Trading, Hotels, Manufacturing & Processing, and Life Insurance segments also shed over 1 percent each. Banking, the heavyweight trading group in the bourse, was also down by 0.46 percent.

Shares of Upper Tamakoshi Hydropower Ltd have continued to trade actively since its listing in the previous week. More than Rs 109 million worth of the hydropower company's shares changed hands on the day. Next on the list were, NIC Asia Bank Ltd Promoter Share and Citizen Investment Trust which registered turnover of over Rs 19 million and Rs 17 million, respectively. Insurance stocks followed suit as Life Insurance Corporation Nepal and Nepal Life insurance Company Ltd registered turnovers of Rs 9 million and Rs 8 million, respectively. Prabhu Bank Ltd, Nepal Bank Ltd and NIC Asia Bank Ltd were the other companies logging high turnovers on Monday.

Among gainers, Gurkhas Finance Ltd led the pack as its share price jumped up by 4.81 percent. Miteri Development Bank Ltd added almost 4 percent on its share price, while SBI Bank Ltd also saw its share price go up by over 3 percent. Besides, share prices of Central Finance Company Ltd, Kankai Bikas Bank Ltd and Pokhara Finance Ltd also gained over 2 percent each.

Upper Tamakoshi Hydropower Ltd, on the other hand, hit the lower circuit of 10 percent for the second consecutive day. Shares of Mirmire Laghubitta Bittiya Sanstha Ltd and Ankhu Khola Jalavidhyut Company Ltd also came under significant pressure as their respective share prices tanked 8 percent and 6 percent, respectively. Share prices of National Hydropower Company Ltd and Mero Microfinance Bittiya Sanstha Ltd also went down by more than 4 percent on the day.

On news, shares of Samudayik Laghubitta Bittiya Sanstha Ltd opened trading on the day. The scrip closed the day at Rs 505 per share. Meanwhile, Laxmi Laghubitta Bittiya Sanstha Ltd published its earnings report for the second quarter of FY2018/19, reporting a modest 9 percent net profit growth year-on-year. Similarly, Guheswori Merchant Banking and Finance Company Ltd's earnings also grew by over 9 percent as per its earnings report for the second quarter.

As per the ARKS technical analysis, the market formed a bearish candlestick on the daily timeframe reflecting the broad downward rally in the day. Moving Average Convergence/Divergence (MACD) has formed a dead cross indicating sellers dominance in the market of late. A breach of 1,160-point on the downside with significant volume might indicate further possible downfall.

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