Daily Market Commentary

Nepse stoops to three-year low

Published On: February 15, 2019 12:30 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The Nepal Stock Exchange (Nepse) dropped to three-year low of 1,112.87 points on Thursday as stocks carried over weaknesses to the last trading day of the week. The benchmark index shed more than 8 points in the first half of Thursday’s session and then wavered throughout the latter trading hours.

With Thursday’s decline, Nepse is now trending more than 40 percent down from its all-time high of 1,881.45 points reached in July, 2016. The local bourse recorded a total turnover of over Rs 2.16 billion on the day. Everest Bank Ltd Promoter Share accounted for almost 90 percent of the daily turnover. Besides this, market activity remained fairly subdued.

All major trading sectors ended the day in red. Hotels sub-index was down 1.57 percent. Further, Non-life Insurance, Microfinance and ‘Others’ scrips also suffered as their respective sub-indices went down by more than 1 percent. The sub-indices of Manufacturing & Processing and Hydropower scrips followed suit posting loss of 0.94 percent and 0.77 percent, respectively. Bellwether banks also struggled as reflected by a decline of 0.59 percent in the group’s sub-index.

Everest Bank Ltd Promoter Share posted the highest turnover of over Rs 1.98 billion. Next, shares of Upper Tamakoshi Hydropower Ltd and Prabhu Bank Ltd were also traded actively as these companies logged transaction of over Rs 15 million and Rs 14 million, respectively. Nepal Credit and Commerce Bank Ltd, and Citizen Investment Trust Ltd, meanwhile, registered turnover of Rs 11 million each.

Among advances, Chautari Laghubitta Bittiya Sanstha Ltd continued its rally, adding 4.75 percent on its share price. Similarly, share price of Nepal Community Development Bank Ltd increased by 3.54 percent. Gurans Life Insurance Company Ltd also saw some strength as its share price closed over 2 percent higher. Siddhartha Equity Oriented Scheme, Samata Microfinance Bittiya Sanstha Ltd and Neco Insurance Co Ltd were among other gaining securities.

On the losers’ front, shares of Nepal Seva Laghubitta Bittiya Sanstha Ltd were the major drag in the bourse after the company posted loss of Rs 3.80 million in the second quarter of FY2018/19. The company’s share price tanked more than 8 percent. Share price of Ngadi Group Power Ltd also slumped 4.76 percent after the energy sector company reported a 23 percent year-on-year decline in its net profit. Furthermore, share price of Naya Nepal Laghubitta Bikas Bank Ltd, World Merchant Banking & Finance Ltd and IME General Insurance Ltd also saw their share price go down by over 4 percent each.

Among companies publishing their financials of the second quarter of the current fiscal year, Sahara Bikas Bank Ltd posted a net profit growth of 35 percent to Rs 11.54 million. Meanwhile, net profit of Premier Insurance Company Ltd grew by a modest 9 percent.

ARKS technical analysis indicates the index forming a bearish candlestick breaching the support at 1,120 points. Hence, bears have remained significantly dominant of late with technical indicators indicating faltering momentum. Immediate support for the equity market lies at the psychological level of 1,100 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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