Daily market commentary

Nepse opens week with moderate losses

Published On: August 5, 2019 08:50 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks began Sunday's trading on a slightly positive note as the Nepal Stock Exchange (Nepse) index gained a couple of points in the morning session. However, weakness ensued after midday as the benchmark index posted a steady decline throughout the remaining trading hours. Nepse eventually closed the day with a modest loss of 4.20 points at 1,259.64 points.

 Local stocks have continued to trade within a narrow span since late June. Investors still remain wary about the possible movement of the benchmark index. Despite the monetary policy announcement and upbeat earnings reports of listed companies, the market is yet to find any significant impetus to drive Nepse upward. Meanwhile, the bourse has continued to see moderate market participation with Rs 474 million worth of shares traded on the day.

Most of the sectors suffered following the dip in the broader index. Only Finance and Microfinance sub-indices managed to close the day posting marginal gains. Losses mainly came from Mutual Fund and Hydropower stocks as their respective sub-indices fell by 0.92% and 0.87%, respectively. Manufacturing & Processing and Non-life Insurance sectors were also down by 0.74% and 0.48%. The sub-index of bellwether banks lost fell by 0.31%. Besides, all other sub-indices ended the day in the negative territory.

Nepal Bank Ltd was the most active stock of the day. More than Rs 51 million worth of the commercial bank's shares were traded on the bourse on Sunday. Agricultural Development Bank Ltd followed suit with turnover of Rs 29 million. Grameen Bikas Laghubitta Bittiya Sanstha Ltd and Prabhu Bank Ltd, meanwhile, registered respective turnovers of Rs 19 million and Rs 18 million. Sanima Bank Ltd, Nepal Credit and Commerce Bank Ltd and Chhimek Laghubitta Bikas Bank Ltd were among other active stocks of the day.

Few microfinance stocks stretched their rallies further. Swarojgar Laghubitta Bittiya Sanstha Ltd, Sparsha Laghubitta Bittiya Sanstha Ltd and Swabhimaan Laghubitta Bittiya Sanstha Ltd saw their respective share prices hit the upper circuit of 10%. Swarojgar Laghubitta Bittiya Sanstha Ltd published its financials for the fourth quarter of FY2018/19 on Sunday, reporting a 120% year-on-year growth in its net profit to over Rs 80 million. Similarly, share prices of Support Microfinance Bittiya Sanstha Ltd, Nepal Agro Laghubitta Bittiya Sanstha Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd also rallied posting gains of over 9% each.

Stocks of Himalayan Power Partner Ltd, on the other hand, suffered the most as its price tumbled by over 5%. Share prices of Infinity Laghubitta Bittiya Sanstha Ltd and Samudayik Laghubitta Bittiya Sanstha Ltd were down by 4.87% and 4.74%, respectively. Likewise, Corporate Development Bank Ltd, Laxmi Laghubitta Bittiya Sanstha Ltd and Civil Laghubitta Bittiya Sanstha Ltd saw their respective share prices go down by over 4% each. 

RSDC Laghubitta Bittiya Sanstha Ltd also published its earnings results on Sunday. The wholesale micro-sector lender saw its net profit grow by over 70% to Rs 64 million in the fourth quarter of FY2018/19.

ARKS technical analysis indicates the market forming a second bearish candlestick on the daily timeframe. Slight weakness is visible in the bourse as the index has reverted back from 1,270-point level. Technical indicators also suggest subdued momentum of late. A breach of 1,240 points might indicate further downward movement. On the other hand, 

given the market stages a rebound from around 1,250 points, the index can be expected to test resistance at around 1,280-1,290 points.

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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