Daily Market Commentary

Nepse posts modest loss

Published On: November 1, 2019 08:55 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks wavered along the opening level with the Nepal Stock Exchange (Nepse) index trading flat in the first half of Thursday’s session. The secondary market came under some pressure thereafter and saw a slight decline in the latter trading hours. Eventually, Nepse ended the day slightly down with a loss of 3.17 points to close the week at 1,146.17 points.

The local bourse failed to hold ground as sellers remained dominant for most of Thursday’s session. The drop saw the index erase some of its pre-holiday gains that came in three straight sessions. Further, no notable change in the financial outlook is apparent contributing to lackluster movement of the broad index. Turnover has also continued to hover in the lower end of the spectrum with only Rs 254 million worth of shares traded on the day.

Most of the sectors closed the day in red. Manufacturing & Processing sub-index was up by 0.58%, while Hotels and ‘Others’ segments added 0.39% each on their sub-indices. Development Bank stocks also edged higher. Mutual Fund sub-index, on the other hand, was the major laggard of the day tanking 2.54%. Subsequently, Non-Life Insurance and Hydropower sectors were down by almost 1%. Sub-indices of Life Insurance, Finance, Microfinance and Banking fell by 0.56%, 0.4%, 0.35% and 0.33%, respectively.

Promoter shares of Prime Commercial Bank Ltd were the most traded scrip of the day. More than Rs 60 million worth of the scrips were traded on the day. Next on the list was Mega Bank Ltd with Rs 22 million worth of shares traded. Correspondingly, Prabhu Bank Ltd and NIC Asia Bank Ltd saw transactions of Rs 17 million and Rs 12 million, respectively. Other active scrips of the day include Siddhartha Bank Ltd, Nepal Credit and Commerce Bank Ltd and Sanima Bank Ltd.

Microfinance stocks dominated the list of gaining sides with share price of Global IME Laghubitta Bittiya Sanstha rallying 7.75%. Ankhu Khola Jalvidhyut Company Ltd also added 7.55% on its share price. Furthermore, Infinity Laghubitta Bittiya Sanstha Ltd and Ghodighoda Laghubitta Bittiya Sanstha Ltd saw their respective share prices go up by 4.32% and 3.86%. Shares of Neco Insurance Co Ltd, Asha Laghubitta Bittiya Sanstha Ltd, Samudayik Laghubitta Bittiya Sanstha Ltd and Multipurpose Finance Company Ltd followed also appreciated by 2% each.

In contrast, Nabil Equity Fund was the worst performer of the day as reflected by a near 10% drop in its value. Energy stocks also came under significant pressure as Himalayan Power Partner Ltd, Panchakanya Mai Hydropower Ltd and Arun Valley Hydropower Development Co Ltd saw their share prices go down by 6.08%, 5.62% and 4.81%, respectively. Unit prices of Best Finance Company Ltd and NMB Hybrid Fund L-1 also fell by over 4% each.

In corporate space, NMB Laghubitta Bittiya Sanstha Ltd issued a notice to Nepse regarding its dividend announcement. The microfinance company has proposed to distribute 12% stock dividend to its shareholders. The proposal is subject to approval of the company’s upcoming annual general meeting (AGM) and the regulator. In other news, Mirmire Laghubitta Bittiya Sanstha Ltd published its financials for the first quarter of Fy2019/20, reporting a significant growth in its net profit. Its net profit stands at Rs 21.37 million compared to Rs. 5.82 million in the corresponding quarter previous year. The growth came on the back of a notable expansion in its net interest income, according to the company’s earnings report.

ARKS technical analysis shows the index formed a small bearish candlestick as the bourse gave up some of its pre-holiday gains. With the index turning southbound on the day, the 1,150-point level has continued to act as a key resistance. Meanwhile, the index has stretched its sideways movement suggesting that no clear direction is visible at the current juncture. Technical indicators also suggest a neutral sentiment. However, Moving Average Convergence Divergence (MACD) line indicates that the market can gather momentum in the sessions ahead. Hence, a breach of the crucial 1,150 points mark might drive the secondary market higher.

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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