Daily Market Commentary

Nepse snaps four-day winning run

Published On: December 19, 2018 01:28 PM NPT By: Republica

KATHMANDU, Dec 19: Trading began on a slightly positive note on Tuesday. The benchmark Nepal Stock Exchange (Nepse) index climbed marginally in early trading. However, a significant drop in stock prices followed, dragging the index down by almost 17 points. The index then wavered in the remaining trading hours to close slightly above its intraday low. Eventually, Nepse closed at 1,168.17 points – down by 14.61 points compared to Monday's closing.

Nepse, which was on a gaining streak, lost its steam on the back of renewed interest rate concerns. Following the interest rate hike on deposits by some commercial banks of late, a few heavyweight banks also published higher interest rates on Tuesday. Hence, sellers dominated the day's trading as the bourse pared all of its previous day's gains. As a result, daily market turnover increased to Rs 532 million from Rs 420 million recorded on Monday.

The broad downward rally sent all the major sub-indices in red. Only 'Others' and Manufacturing & Processing sub-indices eked out marginal gains. The biggest losses came from Non-life Insurance stocks as the group's sub-index corrected by 3.52 percent. Bellwether banking scrips also came under significant pressure as reflected by a 1.49 percent drop in the group's sub-index. Similarly, sub-indices of Development Bank, Microfinance and Hydropower segments lost over 1 percent each. All other sub-indices ended the day lower.

Banking scrips remained active on Tuesday led by shares of Nepal Bank Ltd. More than Rs 50 million worth of the bank's shares changed hands on the day. Second on the list was NMB Bank Ltd with total transaction of over Rs 43 million. Shares of Nepal Credit and Commercial Bank Ltd and Shikhar Insurance Company Ltd followed suit with turnovers of Rs 28 million and Rs 26 million, respectively. Shares of NIC Asia Bank Ltd, Global IME Bank Ltd and Nepal Investment Bank Ltd were also traded actively on the day.

Summit Microfinance Development Bank Ltd added to its previous day's surge and closed 10 percent higher. Similarly, share price of Civil Laghubitta Bittiya Sanstha Ltd rallied 9.81 percent on the day, while Mahila Sahayatra Microfinance Bittiya Sanstha Ltd also saw its share price go up by 7.69 percent. Other micro sector lenders followed suit as share prices of Swadeshi Laghubitta Bittiya Sanstha Ltd and Naya Nepal Laghubitta Bikas Bank went up 5.52 percent and 3.53 percent, respectively.

Conversely, biggest daily losses came from Vijay Laghubitta Bittiya Sanstha Ltd and Rairang Hydropower Development Company Ltd. Share prices of both the companies tanked over 7 percent each. Further, Swarojgar Laghubitta Bikas Bank Ltd, United Insurance Company Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha also saw their respective share prices go down by 5 percent.

In corporate space, Nepal Telecom Ltd, the largest company by market capitalization, declared 55 percent cash dividend to its shareholders from the earnings of Fiscal Year 2017/18.

As per the ARKS technical analysis, the market retraced slightly after four straight days of gains.

Nonetheless, Moving Average Convergence Divergence (MACD) is slightly tilted upward, indicating short-term uptrend is yet to ease off. However, the index's movement on the subsequent days must be observed before taking substantial long positions. Meanwhile, the immediate support for the market lies at 1,140 points.


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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