Nepse posts weekly losses, erasing two week advances

Published On: January 26, 2019 09:13 AM NPT

KATHMANDU, Jan 26:  Stocks started the week on a slightly bearish note with the Nepal Stock (Nepse) index dropping more than 8 points on Sunday. Weakness carried over to Monday's trading as well with the index posting losses of over 11 points on the day. 

The selling pressure eased off mid-week with the benchmark index registering modest gains in Wednesday and Thursday's sessions. Meanwhile, the last trading day of the week saw a minimal loss of less than 1 point. Eventually, the index closed the week fairly lower at 1,172.78 points – down 14.99 points or 1.26 percent against the week earlier. 

Market participation throughout the week remained subdued as investors continue to maintain a cautious stance in the secondary market. Despite upbeat reports being published by few of the heavyweight banks, the market has failed to find considerable optimism. 

Credit crisis has continued to remain as the major hindrance keeping the equity market to post any substantial move to the upside. The exchange posted a below par weekly turnover of Rs 1,626 million. 
Sensitive Index, gauging the performance of Class 'A' stocks, also closed in the red in the review period. It sank 0.97 percent. Most of the sectoral indices also followed the market, except the Finance sub-index which closed marginally higher. 

Biggest weekly losses came from Manufacturing & Processing stocks reflected by a 6.29 percent slump in the group's sub-index. Energy stocks also came under pressure dragged mainly by the losses coming from Upper Tamakoshi Hydropower Ltd. 

The Hydropower sub-index tumbled 5.55 percent. Similarly, sub-index of Life Insurance scrips fell over 1.16 percent while that of heavyweight Banking stocks dipped 0.97 percent. 'Others', Microfinance and Development Bank segments followed suit and posted modest weekly losses. 
In terms of weekly market activity, Upper Tamakoshi Hydropower Ltd registered the highest turnover for a second week in a row. 

More than Rs 481 million worth of the company's shares changed hands. Next Citizen Investment Trust registered a total turnover of over Rs 108 million. Chhimek Laghubitta Bikas Bank Ltd and Machhapuchhre Bank Ltd followed suit with total transactions of Rs. 46 million and Rs. 45 million, respectively. Other active stocks for the week include Prabhu Bank Ltd, Nepal Bank Ltd and Nepal Investment Bank Ltd. 

On the announcement front, few major banks and financial institutions published their second quarterly earnings reports on Friday. Global IME Bank Ltd and Citizens Bank International Ltd reported increments of 25 percent and 22 percent in their respective earnings. 

The net profits of the commercial banks stand at Rs 1.23 billion and Rs 770 million, correspondingly. Similarly, Om Development Bank Ltd, Saptakoshi Development Bank Ltd and Kamana Sewa Bikas Bank Ltd also reported increment in their respective net profits.

AS per the ARKS weekly technical analysis, the market formed a bearish candlestick reflecting weakness in the overall equity market. Technical indicators also suggest slight seller's dominance prevailing of late. Hence, investors are better off taking a cautious stance. The resistance for the market lies around 1,210 points while the immediate support rests at 1,120 points mark.

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