Daily Market Commentary

Nepse rebound stalls after volatile trading

Published On: September 7, 2018 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Sept 7: The stock market witnessed a highly volatile session on the last trading day of the week. The benchmark index Nepal Stock Exchange (Nepse) index, which surged more than 13 points initially, pared its gains later to post a loss of more than 10 points in the afternoon. Toward the close, however, Nepse recouped partial losses to end the day 4.36 points lower at 1,229.77 points.

The market, which was high on confidence in the past five trading days, lost its steam following profit booking seen largely on banking and financial institutions and insurance stocks. Nonetheless, market participation presents active trading taking place on the bourse as turnover further improved by 11.43 percent to Rs 793 million on the day.

On sectoral front, all major sub-indices weakened on the day barring 'Others', Trading and Manufacturing & Processing sub-indices. Non-Life Insurance stocks were the biggest drag on the day as reflected by a slump of 1.39 percent in the group's sub-index. Sub-indices of Hydropower and Development Bank groups followed suit with a drop of over 1 percent each. Microfinance and Life Insurance scrips also came under pressure as their respective sub-indices dropped 0.99 percent and 0.68 percent. Banking sub-index also dropped 0.47 percent on the day.

NMB Bank Ltd topped the list of companies in terms of turnover. Shares worth Rs 103 million of the Class 'A' bank were traded on the day. Next on the list was Asian Life Insurance Company Ltd Promoter which logged transaction of over Rs 55 million. Besides, other commercial bank scrips, including Kumari Bank Ltd, Prime Commercial Bank Ltd, Global IME Bank Ltd Promoter Share and Nepal Bank Ltd, were also actively traded on the day.

In terms of advances, Kabeli Bikas Bank Ltd continued its rally for the fourth straight day to almost hit the upper circuit of 9.65 percent. Vijaya Laghubitta Bittiya Sanstha Ltd followed suit with a surge of 5.84 percent in its share price. Meanwhile, shares of Salt Trading Corporation and Progressive Finance Ltd rose over 4 percent apiece. Similarly, NMB Hybrid Fund L-1 and Siddhartha Equity Fund added 3.97 percent and 3.77 percent on their unit prices, respectively.

On the contrary, Multipurpose Finance Company Ltd was the worst performer for the day as it saw its share price tumble by 9.29 percent. Share price of Ngadi Group Power went down by 5.45 percent, while share price of United Insurance Company fell 4.93 percent. Similarly, share prices of Sindhu Bikas Bank Ltd, United Modi Hydropower Ltd and ICFC Finance Ltd slid over 4 percent each.

On news, NIC Asia Bank Ltd has commenced issue of 1.83 million units of 'NIC Asia Debentures 2082/83' at a par value of Rs 1,000. Of the total issue, 20 percent is allocated for general public and the remaining 80 percent will be sold privately sold. The maturity term for the debenture is seven years while the interest on the security will be paid semi-annually.

As per the ARKS technical analysis model, the index posted a slight correction after five straight days of gains. However, the momentum still favors the bulls at present as the index has managed to close above the crucial 1,224 points mark. Moving Average Convergence/Divergence (MACD) has further rose toward the positive territory. If the index manages to hold above the aforementioned level, further upwards movement is likely in the present context.

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