KATHMANDU, July 2: The stock market remained under pressure since the beginning of Sunday's trading session, ending the day firmly in red. The benchmark Nepal Stock Exchange (Nepse) index slumped over 14 points, or 1.17 percent, to close at three-month low of 1,184.53 points.
The market has added another session to the dull market activity continuing since a month. The slow trading is partially attributed to lack of any significant developments regarding the upcoming monetary policy. Hence, the current context presents little clarity for investors, keeping them from entering the secondary market with conviction. The market registered a subpar turnover of Rs 197 million on Sunday.
All major sub-indices mirrored the performance of the broader market with the Microfinance Sub-index declining by the highest 1.63 percent. Weakness was also visible among insurance and development bank stocks, as Insurance and Development Bank sub-indices slid 1.48 percent and 1.43 percent, respectively.
Banking Sub-Index followed suit, posting a decline of 1.19 percent. Stocks of Nepal Bank Ltd were the most active for the day as Rs 8 million worth of its shares were traded on the day. The bank's Further Public Offering (FPO) of over 17 million unit shares, at Rs 280 per unit, commenced on Friday. It was followed by National Life Insurance Company Ltd with a turnover of more than Rs 7 million. The life insurer has announced July 6 as the book closure date for its 60 percent right issue. Nabil Bank Ltd Promoter Share, Nepal Investment Bank Ltd and Nepal Telecom Ltd were among other active stocks on Sunday – the first trading day of the week.
Among the day's advances, Arambha Microfinance Bittiya Sanstha Ltd was the biggest gainer as it saw its share price go up by 5.88 percent followed by Synergy Power Development Ltd which rose 3.20 percent. Share prices of Naya Nepal Laghubitta Bikas Bank Ltd and Sindhu Bikas Bank Ltd climbed by 2.5 percent each.
On the other hand, Tinau Development Bank Ltd, Hathway Finance Company Ltd and Rairang Hydropower Development Company Ltd were the biggest losing scrips, plummeting over 5 percent each. Next on the list was National Hydropower Company Ltd whose share price slumped 4.88 percent to a 4-year low of Rs 78 per unit.
On the news, Siddhartha Insurance Limited and RSDC Laghubitta Bittiya Sanstha Ltd began their respective rights issues on Sunday. The insurer is issuing 35 percent right shares to its shareholders, while the micro finance company is issuing 60 percent right shares.
ARKS technical analysis model indicates the market continuing its sell-off trend with a formation of a bearish candlestick on the daily timeframe. The market has further nosedived after it failed to cross the resistance of 1,200 points on Thursday's session. Momentum indicators like Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) also suggest that the market lacks significant positive momentum at present. Overall, the downward movement is likely to continue to test the support level of 1,168 points.
This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com (Views expressed are those of the producer and do not necessarily reflect those of this publication)