Daily Market Commentary

Nepse falls to three-year low of 1,100 points

Published On: March 4, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Mar 4: The stock market posted some gains in early trading on Sunday -- the first trading day of the week. However, it failed to sustain the initial gain in the afternoon. As a result, the benchmark index witnessed a steady decline throughout the remaining session. Eventually, the Nepal Stock Exchange (Nepse) index posted a loss of 4.95 points to close the day at 1,100.58 points.

Stocks traded range bound as the bourse has continued to hover near the 1,100 points mark since mid-February. Despite some signs of the benchmark index stabilizing at the current level, investors' optimism regarding the overall market outlook remains low amid lack of major news in the financial market. In the meantime, the exchange continued to witness dry trading volumes. Only Rs 235 million worth of shares changed hands on Sunday.

Majority of sectors struggled on the day with maximum losses coming from Manufacturing & Processing stocks. The group's sub-index tumbled by 1.18 percent. Market heavyweight Banking scrips also ended in red as reflected by a 0.7 percent slump in the segment's sub-index. Microfinance, Non-life Insurance and Hydropower sub-indices also inched lower. On the other hand, Life Insurance sub-index witnessed some strength helped by rise in share prices of Nepal Life Insurance Company Ltd. The group's sub-index climbed up by 0.95 percent. Hotels sub-index also inched higher.

Among active stocks, Nepal Life Insurance Company Ltd witnessed the highest turnover of over Rs 26 million. The insurer announced 25 percent stock dividend and 23.5 percent cash dividend to its shareholders from profit earned in Fiscal Year 2018/19. Next on the list was, Nepal Bank Ltd with total turnover of over Rs 10 million. Other class 'A' banks followed, as Prabhu Bank Ltd and NMB Bank Ltd registered turnover of over Rs 9 million each. Similarly, Rs. 9 million worth of Upper Tamakoshi Hydropower Ltd's shares were traded on the day.

Shares of Bhargav Bikash Bank Ltd led the list of gaining sides with an advance of 5.84 percent. Next ont the list was Nepal Life Insurance Company Ltd which saw its share price surge by 3.45 percent following dividend announcement. Correspondingly, Sanima Hydropower Company Ltd, Janautthan Samudayic Laghubitta Bikas Bank Ltd and Everest Insurance Company Ltd closed over 2 percent higher each.

On losing side, Sindhu Bikash Bank Ltd turned in some of the worst performance of the day as its share price tanked 8.70 percent. Share price of Agriculture Development Bank Ltd also fell by 6.41 percent following its book closure to hold Annual General Meeting (AGM) on Thursday. Energy stocks also came under significant pressure with Ankhu Khola Jalavidhyut Company Ltd, Ghalemdi Hydropower Ltd and Joshi Hydropower Development Company Ltd registering losses of 5.88 percent, 4.74 percent and 4.54 percent, respectively.

On news front, Mero Microfinance Bittiya Sanstha Ltd is floating 3.28 million units of right shares from Sunday. After the issuance, the company's paid-up capital will reach Rs 657 million.

ARKS technical analysis indicates the market extending its downward movement toward three-year low of 1,100 points. Despite technical indicators suggesting weak momentum in the market recently, the index has found some support at the current level. Hence, a rebound from the current range can present some buying opportunities for investors in the short run. Meanwhile, a breach of the psychological level of 1,100 points to the downside might see the secondary market fall further.

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