Daily market commentary

Nepse opens week in red

Published On: September 30, 2019 09:51 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Trading began in the secondary market on an upbeat note on Sunday. The benchmark Nepal Stock Exchange (Nepse), however, gave up its early gains within the first trading hour. It failed to make a comeback and continued to trend in red throughout the trading session, eventually closing the day 4.66 points lower at 1,125.14 points.

The index continued to sink amidst low volume trading sessions, stretching losses to four straight days. Consequently, the index is also approaching its six-month low which was recorded in mid-September. The approaching holidays can be attributed to moderate selling pressure witnessed in the bourse lately as some investors are likely to sell shares to fulfill monetary obligations that may arise during the festivals. Despite an increase in market participation in the previous session, turnover still remains considerably in the lower side of the spectrum. Only Rs 241 million worth of securities were traded on Sunday.

Most of the sectors ended the day lower. Only 'Others' and Development Bank managed to eke out gains. Hotels and Non-Life Insurance scrips suffered the most with their respective sub-indices losing 1.83% and 1.52% on the day. Manufacturing & Processing sub-index followed suit and closed almost 1% lower. Meanwhile, Banking sub-index posted modest move to the downside. All other sectors saw marginal losses.

Prabhu Bank Ltd led the list of active stocks with more than Rs 33 million worth of the shares traded. Sanima Bank Ltd was next on the list with turnover of over Rs 25 million. The bank's stocks were highly in demand as it is closing its shareholder's book on Monday. This means only the shareholders holding shares till Sunday are eligible for dividends declared by the bank. Bank of Kathmandu Ltd Promoter Share, Nepal Life Insurance Company Ltd and Agriculture Development Bank Ltd were among other active stocks of the day.

Ankhu Khola Jalvidhyut Company Ltd was the day's top gainer as it share price recouped 3.77% after a continuous slump since its listing on the exchange. Another energy stock was next on the list as Himalayan Power Partner Ltd saw its share price jump up by almost 3%. Meanwhile, share price of Agriculture Development Bank Ltd was up by 2%. Likewise, share prices of National Hydropower Company Ltd, Prudential Insurance Company Ltd and RSDC Laghubitta Bittiya Sanstha Ltd went up by over 1% each.

Conversely, Himalaya Urja Bikas Company Ltd took a significant knock as its share price tumbled by over 8%. Furthermore, Sindhu Bikash Bank Ltd, Gurkhas Finance Ltd and Samata Microfinance Bittiya Sanstha Ltd saw their respective shares fall by over 6% each. Share price of Machhapuchhre Bank Ltd was also down by over 5% as traders started to sell the bank's shares after realizing this year's dividend. Rastriya Beema Company Ltd and United Modi Hydropower Ltd, meanwhile, saw their share prices go down by almost 4% each.

ARKS technical analysis indicates the market forming another bearish candlestick on the daily timeframe indicating sellers still prevailing in the secondary market. Technical indicators, meanwhile, suggest the move lacking any notable momentum. Hence, the market is likely to stretch its consolidation further. On a positive note, the index is close to its multi-year low making further downward movement less likely. However, traders are suggested to still remain watchful before the market shows a notable sign of a reversal.


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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