Daily market commentary

Nepse sheds 11 points as stock rout continues

Published On: June 17, 2019 09:43 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks witnessed sustained pressure throughout Sunday's trading session. The Nepal Stock Exchange (Nepse) index shed as much as 7 points by midday before trending flat briefly in the afternoon. The benchmark index lost further toward the close to end the day 11.36 points lower at 1,258.27 points.

The index has extended bear run further as investor sentiment remains feeble amid lack of any major news or events on the financial front. Many investors are also taking a cautious stance ahead of the unveiling of monetary policy for the new fiscal year. Market participation continued to remain on the lower side of the spectrum as only Rs 473 million worth of securities changed hands on the day.

All of the traded sectors moved in tandem with the broader market. Microfinance and Non-Life Insurance stocks were the biggest losers, shedding over 2% each. Hotels, Manufacturing & Processing and Finance sub-indices also fell over 1% each. Subsequently, all other sub-indices closed the day marginally lower.

Shares of Nepal Bank Ltd were traded on the day. More than Rs 29 million worth of the commercial bank's shares changed hands on Sunday. Next on the list were Shivam Cements Ltd and Siddhartha Bank Ltd who posted turnovers of over Rs 25 million each. Shares of Agriculture Development Bank Ltd, NIC Asia Bank Ltd and Prabhu Bank Ltd were also traded actively.

In terms of advances, recently-listed microfinance scrips saw considerable strength in the session. Share prices of Nepal Agro Laghubitta Bittiya Sanstha Ltd and Ganapati Microfinance Bittiya Sanstha Ltd both shot up by over 6% each, while Gurans Laghubitta Bittiya Sanstha saw its share price go up by over 4%. Similarly, share price of Himalayan Urja Bikas Company Ltd was up by over 4%. Support Microfinance Bittiya Sanstha Ltd, Panchakanya Mai Hydropower Ltd and Nepal Hydro Developers Ltd were among other top gaining scrips of the day.

On the other hand, Mahila Sahayatra Microfinance Bittiya Sanstha Ltd turned in the worst performance of the day as its share price tanked 7.87%. Shares of Vijay Laghubitta Bittiya Sanstha Ltd, Ankhu Khola Jalvidhyut Company Ltd and Laxmi Laghubitta Bittiya Sanstha Ltd followed suit with losses of over 6% each.

In corporate space, World Merchant Banking and Finance Ltd is organizing its Annual General Meetings (AGM) for fiscal years 2016/17 and 2017/18 on July 6. The company, which has a negative reserve of Rs 227 million as of third quarter of FY2018/19, has not proposed any dividends.

ARKS technical analysis indicates the market forming a bearish candlestick on the daily timeframe. Selling pressure has persisted with the market failing to find any foothold in the downtrend. Technical indicators also suggest bears remaining dominant in the present context. The index has now hit the support zone of 1,250 to 1,260 points where a rebound can be expected. Breach of this support level might see the index drop further.

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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