Daily market commentary

Nepse snaps three-day losing run

Published On: June 18, 2019 10:57 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Nepal Stock Exchange (Nepse) index opened Monday's trading on a flat note. The index fell slightly in the afternoon to hit 1,255-point mark. Nonetheless, a spike in the afternoon saw the index recover its initial losses. At the close, Nepse registered a modest gain of 2.63 points to settle at 1,260.90 points.

The index closed in green on Monday after three straight days of losses. However, the gain seen on the day is minimal with relatively low market participation. The bourse registered a turnover of Rs 404 million – the lowest since mid-April. Hence, the market is yet to show any sign of any notable rebound to follow.

Most of the sub-indices closed the day higher. Only Life Insurance, Microfinance and Development Bank sectors ended the day slightly lower. Biggest gains came from Manufacturing & Processing stocks. 

The group's sub-index was up by 1.05%. Hydropower and Non-life Insurance sub-indices followed suit with gains of 0.75% and 0.71%, respectively. All other sub-indices edged higher. Market heavyweight Banking sub-index eked out a marginal gain of 0.15%. 

Shares of Nepal Bank Ltd and Shivam Cements Ltd were traded actively on the day. Both scrips saw total transactions of over Rs 32 million each. Next on the list was Prabhu Bank Ltd with turnover of over Rs 23 million. Siddhartha Bank Ltd, Agriculture Development Bank Ltd and NIC Asia Bank Ltd were among other active stocks of the day.

Shares of Arun Valley Hydropower Development Company Ltd witnessed considerable strength on the day as its price rallied by 6.73%. Share price of Gurkhas Finance Ltd also surged by 5.13%. Meanwhile, respective share prices of Gurans Laghubitta Bittiya Sanstha Ltd, Nepal Agro Laghubitta Bittiya Sanstha Ltd, Siddhartha Equity oriented Scheme and Ngadi Group Power Ltd were up by over 4% each.

In contrast, Global IME Laghubitta Bittiya Sanstha Ltd registered the biggest loss of the day. Its share price tanked 4.8%. Further, Union Hydropower Ltd, Goodwill Finance Co Ltd and Support Microfinance Bittiya Sanstha Ltd's shares also fell over 4% each. Summit Laghubitta Bittiya Sanstha, Unnati Microfinance Bittiya Sanstha Ltd and Prudential Insurance Company Ltd were among other top losing scrips of the day.

In news, Nepal Rastra Bank (NRB) has approved the acquisition of Bhargav Bikas Bank Ltd by Shine Resunga Development Bank Ltd. With the acquisition, Shine Resunga will now upgrade into a national-level development bank. Meanwhile, Nepse has listed 12% bonus shares of Nabil Bank Ltd for trading. The bank had also announced 22% cash dividend to its shareholders from the profit earned in Fiscal Year 2017/18.

ARKS technical analysis indicates the market forming a spinning top candlestick, reflecting indecisiveness in the day's session. Nonetheless, the gain seen on the day might indicate a possible bounce back from the current support zone if the index manages to hold ground above this level. Else, further downfall can be expected as the overall sentiment remains fairly bearish in the present context.

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