Daily Market Commentary

Stocks falter further

Published On: June 7, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: After opening the day fairly higher, the benchmark Nepal Stock Exchange (Nepse) index trimmed all its losses to trade around 1,285 points in the afternoon. The index traded flat in the latter trading hours to end the day 4.69 points lower at 1,284.59 points.

Nepse witnessed a relatively lackluster session on Thursday as trading remained affected by intermittent technical issues. Consequently, daily market participation also fell by around 18 percent to Rs 588 million. The market has failed to find any significant ground even though investors seemed upbeat regarding the provisions made in relation to the capital market in the budget for the upcoming fiscal year. With the day's losses, Nepse has closed in red for four straight days.

On sectoral front, sub-indices turned in mixed performance on the day. Finance stocks led the gains with a surge of 3 percent in the group's sub-index. Meanwhile, Development Bank, 'Others', Hotels and Mutual Fund sub-indices eked out marginal gains. In contrast, Trading sub-index suffered the most and shed over 2 percent. Life Insurance scrips also struggled as reflected by a 1.33 percent drop in its respective sub-index. Sub-index of the heavyweight banking scrips was also down by 0.49 percent. Besides, all other sub-indices reported modest losses.

Shares of Shivam Cements Ltd continued to trade actively in the secondary market with a turnover of over Rs 77 million. Second on the list was Kailash Bikas Bank Ltd which posted turnover of Rs 42 million. Nepal Bank Ltd, Prabhu Bank Ltd and Taragaon Regency Hotel Ltd were among other active stocks of the day with turnover of Rs 37 million, Rs 33 million and Rs 30 million, respectively.

Corporate Development Bank Ltd turned in the best performance of the day as its share price rallied to hit the upper circuit of 10 percent. Goodwill Finance Co Ltd, World Merchant Banking & Finance Ltd and Karnali Development Bank Ltd followed suit with gains of over 9 percent each. Mainly finance stocks witnessed considerable strength as City Express Finance Co Ltd, Manjushree Finance Ltd, Gurkhas Finance Ltd and Progressive Finance Ltd registered gains of 8 percent, 7.44 percent, 7.02 percent and 6.67 percent, respectively.

Panchthar Power Company Ltd, in contrast, suffered the most as its share price tumbled by over 5 percent. Microfinance stocks, including Civil Laghubitta Bittiya Sanstha Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd, registered losses of over 4 percent each. Other losing securities include Khanikhola Hydropower Co. Ltd, Bishal Bazar Company Ltd and Mountain Hydro Nepal Ltd.

On the announcement front, Sagarmatha Insurance Company Ltd and Siddhartha Insurance Ltd are holding their respective Annual General Meetings (AGMs) on June 28 with endorsement of bonus shares as the main agendas. Sagarmatha Insurance Company Ltd had announced 86 percent bonus shares, while shareholders of Siddhartha Insurance Ltd are due to receive 15.48 percent stock dividend. Similarly, Kamana Sewa Bikas Bank Ltd will be convening its AGM on June 29. Distribution of 1.50 percent bonus shares and 8 percent cash dividend are the key agendas of the AGM.

The index, as per the ARKS technical analysis, formed a bearish candlestick for a fourth straight day, indicating sellers' dominance in recent sessions. With Relative Strength Index (RSI) sloping downwards and Moving Average Convergence Divergence Line (MACD) approaching negative territory, further downward movement can be expected if the market breaks the immediate support at around 1,280-point mark.

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