weekly market commentary

Nepse posts modest weekly loss as consolidation continues

Published On: July 28, 2018 07:17 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, July 28: The benchmark Nepal Stock Exchange (Nepse) Index, which started the week at 1193.39 points, suffered the first trading day declining over 8 points. Despite the Nepse Index rebounding on Monday and Tuesday's trading sessions to climb up to almost 1,200-point level, stocks logged in losses in the remaining two sessions. At the end, Nepse index declined by 2.19 points on week-to-week basis to close at 1,191.20 points.

The bourse experienced another week of slow trading. Investors stayed cautious throughout the week as they kept a close eye on earnings reports published by listed companies. Hence, transactions remained subdued as the weekly turnover further dropped by 27.41 percent amounting to Rs. 1,056 million.

Class 'A' stocks also followed the broader market with the Sensitive Index declining 0.46 points or 0.18 percent in the review period. Major sub-indices turned in mixed performance posting modest moves to either side. Significant strength was visible among hotel stocks as its sub-index surged 2.13 percent. Sub-indices of Others, Trading, and Finance segments also showed modest moves to the upside. Meanwhile, Microfinance sub-index posted the highest decline of 1.29 percent. Furthermore, Life Insurance and Non-Life Insurance sub-indices also shed over 1 percent each. Banking sub-index ended almost unchanged in the review period.

In terms of market activity, commercial banks remained mostly active in the week. Nabil Bank Ltd led the list of active stocks as over Rs. 53 million worth of its shares were traded in the exchange. Second on the list, Nepal Investment Bank Ltd scrips registered a turnover of Rs. 38 million. Nepal Credit and Commerce Bank Ltd, Nepal bank Ltd and Sanima Bank Ltd were among other active stocks for the week. 

Among the commercial banks, Citizen Bank International Ltd reported a net profit growth of 30.21 percent in its fourth quarterly report. Its current net profit stands at Rs. 1,408 million. Nepal Bank Ltd also published their quarterly financial reports, mentioning an increase in its net profit by 9.04 percent. The bank's net profit amounts to Rs. 3,399 million. 

This week, Nepse published a notice urging investors to obtain username and password from broker offices. As of now the investors can view their respective order status and matching process from the online platform. In other news, Nepal Rastra Bank (NRB) has cleared NMB Bank Ltd to receive foreign loan from International Finance Corporation. Funds obtained as such shall be deployed for development projects. 

ARKS technical analysis model indicates that the market remained range bound throughout the week as the index swung between 1,180 and 1,200 points level. The resistance of 1,200 points has still held its place as the index could not close above that level despite surging past 1,200 points intraday on Tuesday. Hence, consolidation has persisted where the market still indicates lack of a clear course for the sole equity market. 

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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