Weekly Market Commentary

Nepse posts 7th straight weekly loss despite midweek rally

Published On: September 7, 2019 08:20 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks experienced a rough start to the week with the Nepal Stock Exchange (Nepse) index losing 11.63 points and 14.44 points on Sunday and Monday, respectively. A notable rally on Tuesday, when the index added 20.56 points, saw the market trim most of its earlier losses. The benchmark index gained another 3.87 points on Wednesday, before losing 3.7 points on Thursday. Eventually, Nepse ended the week with a modest loss of 5.34 points, or 0.45%, to settle at 1,191.07 points.

Following a seven-week decline, the index extended its south-bound movement after breaching the crucial 1,200-point mark. However, on an optimistic note, the index made a 34-point recovery in the review period from its intra-week low of 1,156 points hit on Tuesday. The buying pressure was driven by value investors beginning to pick up stocks as many are trading close to their multi-year lows. Meanwhile, banks and financial institutions (BFIs) have continued to announce decent dividends for the year which also helped the secondary market to hold its ground. Market participation improved slightly this week as the bourse saw a total turnover of over Rs 1,942 million against Rs 1,625 million in the previous week.

In the week, CDS and Clearing Limited (CDSC) introduced a feature on the Meroshare website which allows user to more conveniently declare the weighted cost of investments. Earlier, investors had to provide written calculation of weighted average costs to the broker offices after sale of any of their investments. However, the feature is currently being put up for testing before CDSC officially integrates it into the website.

Class 'A' stocks performed on par with the broader index as sensitive index also fell by 0.51%. On the sectoral front, most of the sub-indices closed the week in red. Nonetheless, Heavyweight banking sub-index bucked the trend with a gain of 0.21%. Development Bank stocks also outperformed as the group's sub-index climbed up by 0.33%. On the losers front, Hotels and 'Others' sectors suffered the most with their respective sub-indices shedding over 2% each. Further, Life Insurance, Finance and Manufacturing & Processing sub-indices were down by 1.88%, 1.75% and 1.57%, respectively. Besides, all other sub-indices witnessed marginal losses.


In the week, NIC Asia Bank Ltd announced its Annual General Meeting (AGM) to be held on September 27 becoming the first among its counterparts to do so. The bank has announced 11.05 % cash dividend and 10 % bonus shares to its shareholders.

ARKS technical analysis indicates a hammer candlestick formation on the weekly timeframe with bulls overcoming bears after the index fell close to 1,150 points level this week. Usually, the candlestick is a signal of bullish reversal given it is accompanied by a bullish candlestick in the subsequent period. Meanwhile, weekly technical indicators suggest that the short-term downtrend is still in action. Hence, investors are suggested to keep a cautious eye in the market next week where a volume-backed bullish movement will give a preliminary buy signal for investors.

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