Daily market commentary

Nepse sheds 15 points as market rout continues

Published On: September 3, 2019 10:03 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: After a futile attempt to recoup losses in the initial trading hour, the Nepal Stock Exchange (Nepse) continued to struggle throughout Monday's trading session. Though selling pressure eased a bit at midday, the bourse continued to see losses in the latter trading hours as the Nepse index posted a loss of 14.45 points to end the day at 1,170.34 points.

Following Monday's slump, the secondary market has stretched its losing run for four straight sessions, giving up almost 40 points on the run. Sentiment remained significantly bearish as all major traded sectors dragged the broader index down. Investors continued to flee the market fearing that the index might tumble further. Market activity increased slightly with the exchange witnessing a turnover of Rs 408 million on Monday.

All traded sectors closed the day in red with Microfinance segment leading the losers. The group's sub-index was down by 1.85%. Hydropower, Life Insurance and Non-Life Insurance sub-indices also took notable knocks, posting losses of 1.76%, 1.71% and 1.52%, respectively. Bellwether banks also weighed on the major average as Banking sub-index was down by 1.26%. All other segments saw moderate losses on the day.

Nepal Bank Ltd led the list of active stocks with turnover of over Rs 25 million. Next on the list were United Finance Ltd and Nepal Life Insurance Company Ltd with turnovers of over Rs 24 million each. Sabaiko Laghubitta Bittiya Sanstha Ltd posted turnover of over Rs. 19 million, while Kumari Bank Ltd and Agriculture Development Bank Ltd recorded transactions of over Rs 18 million each.

In terms of gainers, shares of Dibyashwori Hydropower Ltd recouped 5.45% after hitting all time low of Rs 55 per unit on Sunday. Microfinance scrips followed suit as share prices of Sabaiko Laghubitta Bittiya Sanstha Ltd and Adhikhola Laghubitta Bittiya Sanstha Ltd surged by 4.12% and 3.64%, respectively. World Merchant Banking & Finance Ltd, Oriental Hotels Ltd and Goodwill Finance Co. Ltd were among other advances adding at least 2% each on their share prices.

Conversely, Grameen Bikas Laghubitta Bittiya Sanstha Ltd was the worst performer of the day with the microfinance's stock going down by 8%. Support Microfinance Bittiya Sanstha Ltd and Ngadi Power Ltd also struggled as reflected by a 7% drop on their respective share prices. Further, share price of United Finance Ltd closed the day 6.25% lower. Other losing securities include United Insurance Co Ltd, Synergy Power Development Ltd and Nabil Equity Fund with losses of over 5% each.

On announcement front, Bank of Kathmandu Ltd has announced 17% dividend to its shareholders from the profit earned in fiscal year 2018/19. The dividend includes 11% cash payout and 6% bonus shares. Citizens Mutual Fund 1 has also announced 7% cash dividend to all unit holders.

As per ARKS technical analysis, the index formed a bearish candlestick for a fourth straight session as the benchmark index continues to falter further. Relative Strength Index (RSI) further slipped in the oversold territory reflecting that bears have gained significant control of the market. Hence, the market will likely test its support of 1,160-point zone in the upcoming session. The index's movement, then, might indicate a plausible course of the market.

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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