daily market commentary

Nepse snaps losing streak, ekes out marginal gains

Published On: February 12, 2019 09:30 AM NPT

KATHMANDU, Feb 12: Stocks continued to struggle in the initial trading hour on Monday with the benchmark Nepal Stock Exchange (Nepse) index dropping to as low as 1,124.41 points. The index, however, trimmed all of its beginning losses to trade slightly higher in the afternoon. Though it t pulled back from its intraday high, it maintained a positive bias throughout the latter trading hours. Eventually, the index ended the day 1.34 points higher at 1,128.86 points.

With this, Nepse ended in green after recording losses for three straight sessions. Nonetheless, the total turnover remained fairly unsupportive for a significant strength to follow in the forthcoming sessions. The bourse posted a sub-par turnover of Rs 203 million on the day.

Most of the sectors also advanced in tandem with the broader market except the heavyweight Banking and Manufacturing & Processing sub-indices. Banking sub-index dropped 0.15 percent, while the sub-index of Manufacturing & Processing group was down by 0.53 percent. Among the sectors witnessing strength, Development Bank went up by almost 1 percent followed by Hotels sub-index which climbed up by 0.78 percent. Microfinance sub-index, meanwhile, posted a gain of 0.74 percent. All other sub-indices posted marginal gains in the session.

Shares of Upper Tamakoshi Hydropower Ltd continued to trade actively as more than Rs 14 million worth of the energy stock changed hands on Monday. Next on the list was Nepal Credit and Commercial Bank Ltd with over Rs 9 million worth of shares traded. Further, NMB Bank Ltd and Nepal Life Insurance Company Ltd also registered total transactions of over Rs 8 million each. Nabil Bank Ltd Promoter Share, Prabhu Bank Ltd and National Life Insurance Company Ltd were the other active stocks of the day.

Chautari Laghubitta Bittiya Sanstha Ltd led the list of gaining stocks as its share price went up by 10 percent. Shares of Kalika Power Company Ltd also surged by 7.78 percent after the company reported second quarter profit of over Rs 20 million against Rs 12 million in the same quarter of the preceding year. With the earnings, the company's reserve also turned positive of more than Rs 5 million. Next share price of Shree Investment Finance Co Ltd jumped up by 5 percent, share prices of while Mahalaxmi Bikas Bank Ltd and Sana Kisan Bikas Bank Ltd closed over 3 percent higher each.

In contrast, share price of Barun Hydropower Co Ltd's stocks came under pressure and shed 3 percent on the day. Similarly, Siddhartha Insurance Ltd saw its share price go down by 2.27 percent. Further, Corporate Development Bank Ltd and NLG Insurance Company Ltd posted loss of over 2 percent each. Share price of Unilever Nepal Ltd also fell by 2 percent, extending its losing run to fourth consecutive day. 

On the earnings front, Bank of Kathmandu Ltd has published its financials for the second quarter of FY2018/19, reporting a 33 percent year-on-year growth in its net profit to Rs 737 million. Similarly, among other listed companies publishing their earnings reports on the day, Nepal Insurance Company Ltd posted a 71.20 percent growth in its net profit, while net profit of Everest Insurance Company grew by a modest 5.87 percent.

As per the ARKS technical analysis, the market formed a small bullish candlestick on the daily timeframe as the selling pressure eased slightly on the day. However, with highly subdued market activity and technical indicators suggesting weak momentum, the market is yet to see any sign of a significant reversal. A major support for the market lies at around 1,120 points mark.

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