Daily market commentary

Nepse inches lower for second straight day

Published On: October 22, 2019 04:42 AM NPT

KATHMANDU, Oct 22 : The local bourse opened Monday's trading on a flat note and hovered around 1,133 points in morning trading.

Stocks saw some strength in the afternoon with the Nepal Stock Exchange (Nepse) index trading slightly in the green.

However, a small dip in the closing hour saw the equity index post a modest loss of 1.33 points to settle at 1,132.40 points.

Sluggish trading continued to prevail in the bourse with the Nepse refusing to make any remarkable move towards either side. Investors have also remained largely off their trading desks between the major holidays. Hence, lackluster trading will likely continue till Tihar holidays. On the fundamental side, most of the scrips have now reached their multi-year lows with majority being a good bet for value investors.

Hence, overall selling pressure has also subsided in the sessions of late. Market activity remained subdued with only Rs 164 million worth of shares traded on Monday.

Major sectors ended mixed. Life Insurance sub-index led the gains climbing 0.34%. Mutual Fund, 'Others' and Non-Life Insurance sectors also added at least 0.2% each. Hotels and Microfinance segments also closed in the green. On the other hand, Manufacturing & Processing stocks struggled with the respective sub-index shedding 0.68%. Hydropower sub-index followed with a loss of 0.54%. Development Bank, Finance and Banking scrips also inched lower.

Shares of Prabhu Bank Ltd continued to witness heavy trading. Rs 19 million worth of the commercial bank's shares were exchanged on the day. Nepal Bank Ltd and Mega Bank Ltd followed with turnovers of over Rs 7 million each. Shivam Cements Ltd and Nepal Life Insurance Company Ltd, meanwhile, posted transactions of over Rs 6 million each.

Among gainers, Ghodi Ghoda Laghubitta Bittiya Sanstha Ltd rallied 4.81%. Prime Life Insurance Company Ltd closely followed with a 4.18% advance. Next, Asha Laghubitta Bittiya Sanstha Ltd shot up by 3.13%. Miteri Development Bank Ltd, Barun Hydropower Co. Ltd and NIBL Pragati Fund were among other top advances of the day.

Conversely, Everest Bank Ltd Convertible Preference share took a major hit tanking more than 9% in the session. Shares of Radhi Bidyut Company Ltd also suffered sinking over 5.55%. Other losing scrips include Karnali Development Bank Ltd, Mahila Sahayatra Microfinance Bittiya Sanstha Ltd and Best Finance Company Ltd with each dropping over 3%.

On the announcement front, Standard Chartered Bank Ltd published a notice to Nepse declaring its dividend for the year 2018/19. The Class 'A' financial institution has proposed to distribute 22.50% cash payout to its shareholders. The decision is subject to approval from its Annual General Meeting (AGM).

As per the ARKS technical analysis, the index stretched its losses with another small bearish candlestick. However, recent drops in the index are minimal amid absence of significant selling pressure. Meanwhile, buyers are also avoiding taking major positions with indecision still hovering over the secondary market. Technical indicators also show slightly bearish to neutral sentiment in the present context. Hence, investors are suggested to maintain a wait and watch stance unless a clear breakout from the current range is observed.

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