Daily Market Commentary

Nepse finishes 7.38 points lower

Published On: February 7, 2019 09:25 AM NPT By: Republica

KATHMANDU: The equity market came under pressure from the starting of Wednesday's trading session as the Nepse index shed more than 8 points in the second half of trading and continued in the negative territory throughout the day. As a result, the index lost 7.38 points or 0.64 percent to close at 1139.72 points. 

In terms of overall market activity, the bourse continued its sluggish run on the day. Over Rs 235 million worth of shares were exchanged on the day's session. However, the turnover still appeared unsupportive for a strong uplift to follow.

In terms of sectors, all the sub-indices closed in the red. Major weakness was visible among Hydropower and Manufacturing & Processing stocks as their sub-indices closed by 1.3 percent and 1.29 percent, respectively. Sub-indices of Hotels, Life Insurance, and Microfinance sectors also shed 0.81 percent, 0.79 percent, and 0.75 percent, respectively. Finance, Non-Life Insurance, Others, and Development Bank sub-indices also ended the day on a meager decrement.

Shares of Upper Tamakoshi Hydropower Ltd registered the highest turnover for the second consecutive day. More than Rs 16 million worth of its shares were exchanged in the market. Next, Nepal Bank Ltd followed suit with a total transaction of over Rs 14 million. Similarly, Mero Microfinance Bittiya Sanstha Ltd and United Insurance Co. (Nepal) Ltd posted turnovers of over Rs 11 million each. 

On Wednesday, the Board of Directors of United Insurance Co Nepal Ltd's decided to issue 240 percent right share to meet the minimum capital requirement. The proposal is yet to be approved by the company's Annual General Meeting and the Beema Samiti. After the adjustment of the proposed shares, the paid up capital will reach Rs 1.02 billion. 

Nepal Life Insurance Co. Ltd, Nepal Insurance Company Ltd, NMB Bank Ltd and Kumari Bank Ltd were the other top turnover stocks. 

Samudayik Laghubitta Bittiya Sanstha Ltd saw the biggest advance for the second day in a row by gaining almost 10 percent on its price. Furthermore, Chautari Laghubitta Bittiya Sanstha Ltd and Barun Hydropower Co. Ltd followed suit with increment of 4.81 percent and 3 percent, respectively. 

Likewise, shares of Civil Laghubitta Bittiya Sanstha Ltd and United Insurance Co. Nepal Ltd jumped over 2 percent apiece in their prices. 

Global IME Samunnat Scheme-1 was the worst performer for the day, as its unit share price dropped almost 5 percent. Next on the list, shares of Unnati Microfinance Bittiya Sanstha Ltd slipped over 4 percent. Likewise, stocks of Ngadi Group Power Ltd and Radhi Bidhyut Company Ltd slid over 3 percent each.

Meanwhile, companies continue publishing the second-quarter earnings report. Agriculture Development Bank Ltd has reported a significant rise of 32.56 percent in its net profit in Fiscal Year 2018/19. Its net profit stood at Rs 1.36 billion. Among the microfinance companies publishing their earnings reports, Arambha Microfinance Bittiya Sanstha Ltd and Kisan Microfinance Bittiya Sanstha Ltd saw their respective net profits increase by over 497 percent and 414 percent, respectively. 

As per the ARKS technical analysis, the market formed a bearish candlestick on the day with dismal volume. Furthermore, major technical indicators still suggested weak momentum in the market with the index lacking significant conviction at the current moment. Hence, the market failed to hold its ground at 1,140 points on Wednesday's trading. 

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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