KATHMANDU, June 16: Following the press release by Securities Board of Nepal (Sebon), stocks remained firmly under pressure throughout Wednesday’s session. Stocks plunged in the beginning trading hour, but hovered over 3,000 mark in the first half of the trading session. However, a sharp selling pressure in the latter hours pushed the benchmark 52.39 points lower to close at 2,969.72. 

The press release by stock market regulator listed 51 companies, which were deemed risky in their study based on few criteria. Alongside, Sebon has also urged the investors to invest with caution weighing in all investment related risks. However, the board’s release has received notable outcry from the investors with many claiming that the regulator has gone beyond its scope while pointing out ‘overvalued shares’ and that it is up to the investors to decide on the valuation of the listed companies. Consequently, most of the stocks on the list fell on the day dragging even other stocks towards the negative territory. Turnover also fell slightly compared to the session earlier. Rs. 15.48 billion worth of the equities changed hands on Wednesday. 

Barring microfinance sector, all segments ended the day in red. Finance and Hotels & Tourism segments suffered the most with the respective sub-indices plunging 6.81% and 5.15%. Hydropower and Development Bank stocks also struggled closing more than 4% lower on average. Manufacturing & Processing sub-index tanked 3.17%. All other sectors witnessed sharp declines. Heavyweight banks fell marginally. 

Shares of Nepal Reinsurance Company Ltd were traded the most with over Rs. 609 million worth of the scrip changing hands. Himalayan Distillery Ltd, next, registered a turnover of Rs. 556 million. National Hydropower Company Ltd, Arun Valley Hydropower Development Company Ltd and Api Power Company Ltd’s shares were also heavily traded with corresponding turnovers of Rs. 467 million, Rs. 344 million and Rs. 314 million. 

CEDB Hydropower Development Company Ltd stretched its post-listing rally hitting positive circuit of 10%. First Microfinance Development Bank Ltd and Union Hydropower Ltd’s shares also jumped 7.2% and 6.44%. RSDC Laghubitta Bittiya Sanstha Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd and Kalika Laghubitta Bittiya Sanstha Ltd were among other major gainers.

Meanwhile, Joshi Hydropower Development Company Ltd and Gurkhas Finance Ltd were the major losing stocks with both slumping 10%. Besides, many other hydropower and finance stocks tanked sharply. 17 companies in total lost more than 9% on the day. 

As per the ARKS technical analysis, the equity market formed a strong bearish candlestick on the daily timeframe. A sharp dip dragged the index to its intraday low at around 2,950 mark, from where a small rebound was witnessed within the session. 2,950 mark still acts as the immediate support, a breach of which can point towards possibility of further correction in the equity market. However, a sustained rebound with volume can see the market stretch its uptrend further.

This column is produced by ARKS Capital Advisors Ltd.

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)

 
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