Daily Market Commentary

Nepse inches down in low volume trading session

Published On: January 3, 2019 10:26 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 3: The equity index turned in a choppy session on Wednesday and primarily maintained a negative bias throughout the day's trading. The Nepal Stock Exchange (Nepse) index rose slightly initially but witnessed a continuous decline in the latter trading hours. At the close, the index posted a loss of 5.42 points to rest slightly above 1,180 points. 

Nepse witnessed another bland trading session amid absence of any major catalyst in the financial space. The bourse recorded a sub-par turnover of Rs 257 million in the day.

Investors seem relatively less enthused to take any significant positions in the secondary market as the market has now stretched its losing run for five straight sessions.

Most of the major sub-indices turned red following the broader equity market. Only Trading and Microfinance sub-indices posted moves to the upside. Life Insurance stocks continued to struggle after their rally in the previous week. The group's sub-index slumped 1.12 percent in the day. Similarly, Hydropower scrips also came under pressure as reflected by a 1.03 percent drop in the respective sub-index. Furthermore, sub-indices of 'Others' and 'Banking' sectors declined 0.78 percent and 0.43 percent, respectively. 

Shares of Chilime Hydropower Company Ltd saw the highest turnover in Wednesday's bland session. More than Rs 22 million worth of the energy sector stocks changed hands. The company is closing its shareholder's book on Thursday to prepare for its upcoming Annual General Meeting (AGM). The meeting is due to approve 20 percent bonus shares and 5 percent cash dividend to its shareholders. 

Nepal Life Insurance Company Ltd's shares also traded actively with a turnover of over Rs 14 million. Next, shares of Chhimek Laghubitta Bikas Bank Ltd posted a total transaction of over Rs 12 million. NMB Bank Ltd and Janata Bank Nepal Ltd registered turnovers of Rs 10 million and Rs 8 million, respectively. 

Kalika Laghubitta Bittiya Sanstha Ltd added to its previous day's rally and jumped 9.42 points on the day. United Insurance Company Ltd also saw significant strength as its share price surged 8.79 points. 

Meanwhile, Salt Trading Corporation and Nirdhan Utthan Laghubitta Bittiya Sanstha posted gains of over 4 percent each. Suryodaya Laghubitta Bittiya Sanstha Ltd, Prudential Insurance Company Ltd and Deva Bikas Bank Ltd were among other top gaining stocks. 

On the other hand, Arun Kabeli Power Ltd and Hathway Finance Ltd were among the biggest decliners of the day. Their respective share prices slumped over 4 percent each. Similarly, Gurkhas Finance Ltd dropped 3.8 percent in the session. 

Besides, shares of Siddhartha Insurance Ltd, Samata Microfinance Bittiya Sanstha Ltd and Ridi Hydropower Development Company Ltd registered losses of over 3 percent each. 

In the news, Mithila Laghubitta Bittiya Sanstha Ltd received approval from Nepal Rastra Bank for issuing 50 percent right shares to its shareholders.

As per the ARKS technical analysis, the index formed a bearish candlestick for a fifth consecutive session. Hence, bears seem to be in control of late. Technical indicators also suggest the market losing its momentum following the downfall. Nonetheless, since the equity market has experienced a significant drop in market volume, the bourse lacks conviction in the current juncture. 

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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