Daily market commentary

Nepse sees modest drop hitting a fresh 3-month low

Published On: August 14, 2019 04:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Aug 14: The Nepal Stock Exchange (Nepse) index remained under some pressure throughout Tuesday's trading hours. The index traded flat initially but gave up ground in the afternoon with a steady decline thereafter. At the close, the equity index posted a loss of 2.78 points to settle at 1,231.07 points.

Despite the selling pressure easing off in the session earlier, local stocks struggled on Tuesday. The bourse has failed to find any support amid lack of any major news or events in the financial or economic front, while the issue of capital gain taxation still remains officially unaddressed. The index has now dropped to its lowest closing level in 3 months. Market participation remained moderate with total turnover of Rs 481 million.

All major sectors, barring the Mutual Fund segment, closed in the red. Hotels segment suffered the most as the group's sub-index dropped over 1 percent. Sub-index of 'Others' scrips fell 0.67 percent, while that of Development Bank stocks shed 0.45 percent. Besides, all other sectors registered modest moves to the downside. Heavyweight banking sector also dropped marginally.

Shares of Machhapuchhre Bank Ltd and Laxmi Bank Ltd were traded the most with the transactions ofthe two scrips accounting for more than 40 percent of the day's total activity. The banks registered turnovers of Rs 130 million and Rs 86 million, respectively. Next, Muktinath Bikas Bank Ltd Promoter Share saw a turnover of over Rs 19 million. Further, Nepal Bank Ltd and Rasuwagadhi Hydropower Company Ltd posted turnovers of over Rs 14 million apiece.

In terms of gainers, United Modi Hydropower Ltd surged 7.62 percent after dropping close to its all-time low in the week. Similarly, World Merchant Banking & Finance Ltd and Nepal Agro Laghubitta Bittiya Sanstha Ltd rallied over 4 percent each. Ridi Hydropower Development Company Ltd, Laxmi Laghubitta Bittiya Sanstha Ltd and Union Hydropower Ltd followed suit with gains of over 3 percent each.

Among losers, NLG Insurance Company Ltd's shares led the decline. The insurer's price tanked 3.72 percent. Another non-life insurer followed as Prudential Insurance Company Ltd dropped 3.46 percent. Nepal Seva Laghubitta Bittiya Sanstha Ltd, Panchthar Power Company Ltd and Jyoti Bikas Bank Ltd's stocks also came under pressure sinking over 3 percent each. National Hydropower Company Ltd, Khanikhola Hydropower Company Ltd and Pokhara Finance Ltd were among other declining securities.

In the major news, First Microfinance Laghubitta Bittiya Sanstha Ltd became the first listed company to announce dividend for the Fiscal Year 2018/19. The company has proposed 17 percent stock dividend to its shareholders which is subject to approval from its Annual General Meeting (AGM). Meanwhile, listed companies continue to report strong financials in the fourth quarter. As per the respective earnings report, Lumbini Bikas Bank Ltd and Garima Bikas Bank Ltd reported year-on-year net profit growth of 71 percent and 26 percent. Similarly, profit after tax of Sana Kisan Bikas Laghubitta Bittiya Sanstha Ltd also surged by 25 percent.The equity index, as per the ARKS technical analysis, formed a bearish candlestick on the daily timeframe as the bourse stretched its August's losses further. Weak sentiment is apparent in the market as reflected by technical indicators. The index is also trending below short term moving averages indicating short term downtrend still in action. A notable support now lies at 1,200 points level where the index's movement will be key in determining plausible direction of the equity market.

This column is produced by ARKS Capital Advisors Ltd

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)


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