Daily Market Commentary

Nepse nears 1,100 points

Published On: February 27, 2019 05:30 AM NPT By: Republica

KATHMANDU, Feb 27: After witnessing a late rally in the previous day, trading opened on a flat note on Tuesday. Stocks dropped slightly in the afternoon as the Nepal Stock Exchange (Nepse) index wavered above the psychological 1,100-point level throughout the day. At the close, Nepse posted a loss of 7.17 points to settle at 1,102.56 points.

Amid thin trading observed in the day, the index pared most of the previous day's gains to pull back to the psychological 1,100-point mark. Consequently, Nepse has closed in the consolidation zone of 1,100-to 1,120 points for the fifth straight day. As the market lacks conviction in the current scenario, the bourse witnessed a minimal turnover of Rs 16 million.

Weakness was visible among all traded sectors as all sub-indices closed the day in red. Hotels sector saw the biggest losses as the group's sub-index tumbled 1.58 percent. Similarly, sub-indices of 'Others', Manufacturing & Processing, and Microfinance scrips also sank by over 1 percent each. Non-life Insurance, Hydropower and Life Insurance stocks followed suit. Meanwhile, the heavyweight Banking sub-index closed 0.49 percent lower.

Upper Tamakoshi Hydropower Ltd led the list of companies in terms of transaction amount. More than Rs 7 million worth of the hydropower company's shares were traded on the day. Next on the list was Nabil Bank Ltd with transactions of over Rs 6 million. Further, Agriculture Development Bank Ltd and NMB Bank ltd witnessed transactions of almost Rs 6 million each. Promoter shares of Janata Bank Nepal Ltd and Rastriya Beema Company Ltd were also traded actively on the day.

Among gaining stocks, shares of National Hydropower Company Ltd retraced by 3.33 percent after hitting 5-year closing low on Monday. Purnima Bikas Bank Ltd followed suit as its share price went up by 2.67 percent. Similarly, Gurkhas Finance Ltd, Global IME Laghubitta Bittiya Sanstha Ltd and Panchakanya Mai Hydropower Ltd were other advancing stocks of the day.

In contrast, Joshi Hydropower Development Company Ltd extended its losing run as its share price tanked by almost 8 percent. Shares of Nadep Laghubitta Bittiya Sanstha Ltd and Himalayan Distillery Ltd also struggled, losing almost 4 percent each. Among others, Swadeshi Laghubitta Bittiya Sanstha Ltd, Asian Life Insurance Company Ltd and Mirmire Laghubitta Bittiya Sanstha Ltd also closed in red with loss of over 3 percent each.

On news front, Nagbeli Laghubitta Bittiya Sanstha Ltd is holding its Annual General Meeting (AGM) on March 29. Distribution of 9.38 percent bonus shares and 25 percent rights issue are the key agendas of the AGM. The micro-sector lender is closing its shareholders' book on March 13 for the AGM.

ARKS technical analysis indicates the market forming a bearish candlestick, reflecting selling pressure witnessed in the day. The index has also continued to trade range bound as it is showing signs of consolidation. Technical indicators still show that bears remain dominant in the present context. Hence, the failure of the benchmark index to maintain its foothold above 1,100 points might see the index tumble further.

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