Daily market commentary

Nepse snaps four-day winning run

Published On: May 17, 2019 08:52 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks lacked conviction in the last trading session of the week as the Nepal Stock Exchange (Nepse) index hovered around 1,320 points throughout the day. After climbing higher in the morning, the benchmark index pared its gains to fall to as low as 1,314 points in the afternoon. Though the index recovered toward the close, it maintained negative bias to settle 2.29 points lower at 1,318.71 points on Thursday. 

After closing in green in the first four trading days of the week, the last trading day saw the Nepse close lower snapping its gaining run. The modest loss logged on the day can be taken as a correction as the overall market sentiment remains fairly bullish. Meanwhile, active market participation was experienced on the day as the bourse registered total turnover of Rs 948 million.

The marginal movement of the broader index can be attributed to mixed performance of the traded sectors. Manufacturing & Processing sub-index jumped up by 3.89% as share price of Shivam Cements Ltd continued to surge. Development Bank sub-index also closed 1.34% higher. Finance, Non-life Insurance and Mutual Fund sectors also closed the day in green. In contrast, sub-indices of Banking and Hotels stocks were down by 0.7% and 0.6%, respectively. Sub-indices of Microfinance, Life Insurance, Hydropower and ‘Others’ scrips also registered marginal losses.

Shivam Cements Ltd was the most traded scrip of the day with total turnover of over Rs 134 million. Nepal Bank Ltd and Nepal Credit and Commercial Bank Ltd followed suit with turnover of Rs 68 million and Rs 50 million, respectively. Stocks of Agriculture Development Bank Ltd, Asian Life Insurance Company Ltd Promoter Share and Premier Insurance Company Ltd were also traded actively in the session.

Among gaining sides, Shivam Cements Ltd continued to climb higher despite retracing in the previous session. Its share price hit positive circuit of 10% on the day. Multipurpose Finance Ltd and Karnali Development Bank Ltd also saw significant strength, logging gains of over 9% each. IME General Insurance Company Ltd, Rastriya Beema Company Ltd and Mahalaxmi Bikas Bank Ltd were among other top gainers of the day.

In contrast, shares of Agriculture Development Bank Ltd struggled and its price tanked 3.88%. Likewise, Corporate Development Bank Ltd and Progressive Finance Ltd posted decline of 3.80% and 3.77%, correspondingly. Further, unit prices of Global IME Samunnat Scheme – 1, Unnati Microfinance Bittiya Sanstha Ltd and Mahila Sahayatra Microfinance Bittiya Sanstha Ltd dropped by over 3% each.

In corporate space, Prime Commercial Bank Ltd is organizing its Annual General Meeting (AGM) on June 9. The meeting is due to approve a proposal to distribute 16% stock dividend to the commercial bank’s shareholders. 

ARKS technical analysis indicates the market forming a spinning top candlestick, indicating indecision in the bourse. The resistance at around 1,320-point mark has still held ground despite the market crossing the respective level in intraday trading. Hence, a surge and close above 1,320 points mark with substantial volume in upcoming sessions might indicate another possible upward movement in the bourse. 

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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