Daily market commentary

Nepse extends losses for third straight day

Published On: September 10, 2019 07:15 AM NPT By: Republica

KATHMANDU, Sept 10: The benchmark Nepal Stock Exchange (Nepse) index opened with modest gain and climbed to 1,180 points in the morning. Nonetheless, the index reverted to losing ways as it gave up earlier gains and struggled in the remaining trading hours. A steady decline saw the equity index post a loss of 9.54 points to 1,168.91 points.

With the day's loss, the equity market has dropped for three consecutive sessions hitting a fresh 5-month low. Though the bourse showed some signs of recovery in the previous week, lack of any major economic or financial impetus has resulted in the bourse shedding its prior mid-week gains.

Nonetheless, selling pressure seemed relatively subdued as most of the scrips have reached some of their cheapest levels. In the meantime, the secondary market saw a sub-par turnover of Rs 299 million.

Barring Manufacturing & Processing sector, which added a meager 0.22 percent, all other stocks mirrored the broader market. Hard hit in the day were Hotels stocks. The group's sub-index tanked 2.29 percent. Trading and 'Others' sub-indices fell at least 1.6 percent each. Sub-indices of Non-Life Insurance, Mutual Fund and Life Insurance segments sank over 1 percent each. Besides, all other sectors closed the day marginally lower.

In terms of actives, Rs 40 million worth of Civil Bank Ltd Promoter Shares changed hands on Monday. Commercial banks followed suit as Kumari Bank Ltd, Everest Bank Ltd and Laxmi Bank Ltd registered turnovers of over Rs 11 million each. Similarly, Nepal Life Insurance Company Ltd and Adhikhola Laghubitta Bittiya Sanstha Ltd saw transactions of over Rs 10 million each.

Among advances, shares of Adhikhola Laghubitta Bittiya Sanstha turned in the best performance of the day. The microfinance's share price jumped over 5 percent. Himalaya Urja Bikas Company Ltd and Mahila Sahaytra Microfinance Bittiya Sanstha Ltd also saw strength as the corresponding prices climbed over 4 percent apiece. Energy stocks were among other gainers. Barun Hydropower Co. Ltd, Universal Power Company Ltd and Panchakanya Mai Hydropower Ltd saw gains of over 2 percent each.

On the other hand, shares of United Insurance Company Ltd and mutual fund units of Global IME Sammunat Scheme – 1 suffered the most giving up over 5 percent each. Next, Nepal Hydro developers Ltd declined 4.85 percent. Other major decliners were Bishal Bazar Company Ltd, Global IME Laghubitta Bittiya Sanstha Ltd, United Modi Hydropower Ltd and Life Insurance Co. Nepal with each scrip closing over 3 percent lower.

In the earnings front, recently listed Adhikhola Laghubitta Bittiya Sanstha Ltd published its fourth quarterly report for the Fiscal Year 2018/19. The micro sector lender reported a net profit of 14.88 million against a loss of 1.63 million in the corresponding quarter of previous fiscal year. Barun Hydropower Company Ltd also reported fourth quarter net profit of Rs 520,867. The energy sector company had made a loss of almost 5 million in the previous fiscal year.

ARKS technical analysis indicates dominance of bears in the present context as reflected by three consecutive red candlesticks. Technical indicators have extended its south bound movement indicating downtrend continuation. The equity market's immediate support lies at 1,160 points mark, the breach of which will give out further sell signal. On the other hand, for a notable shift in direction, a rebound backed by substantial volume will be a key factor.

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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