daily market commentary

Nepse snaps losing run

Published On: October 9, 2018 09:07 AM NPT

KATHMANDU, Oct 9: Trading began on a positive note on Monday, gaining more than six points initially. Though the remaining sessions were relatively lackluster, the benchmark Nepal Stock Exchange (Nepse) index gained 6.16 points to close the day at 1,220.52 points. 

Monday's gain helped the index recoup some losses from the preceding session. Market activity, however, seemed comparatively subdued with daily turnover falling by more than 8 percent to Rs 371 million. Despite the market ending in green, investors seemed reluctant to take major positions on the heels of downfall seen over the past few sessions. 

Majority of sub-indices ended the day in green following the broader market. Hotels sector was the major contributor to Monday's gain with its sub-index going up by over 2.68 percent. Banking and Development Bank stocks also logged gains of 0.71 and 0.82 points, respectively. Microfinance, Manufacturing & Processing, and Non-Life Insurance stocks followed suit with their sub-indices closing slightly higher. 'Others' and Life Insurance sub-indices, however, logged losses.

Machhapuchhre Bank Ltd led the list of active stocks with a turnover of over Rs 96 million. Next on the list were NIC Asia Bank Ltd and Nepal Credit and Commerce Bank Ltd which recorded turnover of over Rs 12 million each. Shares of Himalayan Distillery Ltd and Mega Bank Ltd were also actively traded with turnover of more than Rs 10 million each. Sanima Bank Ltd, Nepal Life Insurance Company Ltd and Prabhu Bank Ltd were among the other active stocks of the day.

In terms of advances, Nadep Laghubitta Bittiya Sanstha Ltd continued its surge for the sixth straight day, gaining almost 10 percent. Central Finance Company Ltd and Shree Investment Finance Co Ltd followed suit, as their stock price surged by 5.08 percent and 4.23 percent, respectively. Other major gainers included NIBL Pragati Fund, Lumbini Bikas Bank Ltd and Nerude Laghubitta Bikas Bank Ltd.

Conversely, Manjushree Finance Ltd was the biggest drag in the bourse on Monday as the Class 'C' financial institution saw its share price go down by over 3 percent. Similarly, prices of hydropower sector stocks, including Ngadi Group Power Ltd and National Hydropower Company Ltd, fell by 2.66 percent and 2.40 percent, respectively. Further, share prices of Kanchan Development Bank Ltd, Swarojgar Laghubitta Bikas Bank Ltd, Support Microfinance Bittiya Sanstha Ltd and Jebils Finance Ltd shed over 2 percent each.

Among the companies announcing dividends, Nepal Seva Laghubitta Bittiya Sanstha Ltd has declared 5 percent cash dividend to its shareholders from its earnings of Fiscal Year 2017/18. In the meantime, Vijaya Laghubitta Bittiya Sanstha Ltd has proposed to distribute 10 percent stock dividend to its shareholders.

As per the ARKS technical analysis, the index formed a bullish candlestick on a daily timeframe as the market erased some of its previous day's losses. 

Despite the rise, the overall sentiment still favors the bears as reflected by technical indicators. Further, market participation has also dropped in the sessions of late, suggesting weakening momentum. If the index sustains above the 1,210-point mark in the forthcoming sessions, a rise to the immediate resistance of around 1,235 point level is likely.

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com (Views expressed are those of the producer and do not necessarily reflect those of this publication)

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