weekly market commentary

Nepse unchanged after choppy session

Published On: November 2, 2018 07:27 AM NPT By: Republica

KATHMANDU, Nov 2: Nepal Stock Exchange (Nepse) index swung between gains and losses in the last trading session of the week, eventually closing the day unchanged. The benchmark index traded lower for most of the initial trading hours. It, however, made a rebound in the afternoon to reach an intra-day high of 1,223.76 points. Nonetheless, a modest dip toward the close saw the Nepse index end essentially flat. Nepse dropped a marginal 0.48 points to close the week at 1,220.98 points.

After a steep drop at the beginning of the week, the selling pressure has somewhat eased off of late. Nonetheless, investors still lack significant conviction. Market activity showed some improvement on Thursday with the bourse posting a turnover of over Rs 246 million, up from Rs 167 million in the preceding session.

Major sectors registered mixed performance contributing to the marginal movement of the broader market. Among the advances, Hotels sub-index added 0.58 percent. Similarly, Life Insurance and Development Bank sub-indices closed 0.24 percent and 0.17 percent higher. Meanwhile, Non-life Insurance, Microfinance and Finance sub-indices eked out slight gains. Manufacturing & Processing sub-index, on the other hand, dropped 0.59 percent followed by Hydropower sub-index which was down by 0.44 percent. ‘Others’ and Banking sub-indices also closed the week in red.

In terms of market activity, Sanima Bank Ltd posted the highest turnover of over Rs 26 million after the ‘A’ class bank announced 14 percent cash dividend to its shareholders. Further, Life Insurance Co Nepal and NIC Asia Bank Ltd registered total transactions of over Rs 17 million and Rs 12 million, respectively. Meanwhile, shares of Prabhu Bank Ltd and Machhapuchhre Bank Ltd were also actively traded with total turnover of Rs 10 million each.

Stocks of Manjushree Finance Ltd advanced the most, adding 4 percent on its price. Shares of Support Microfinance Bittiya Sanstha Ltd, Panchakanya Mai Hydropower Ltd and Khanikhola Hydropower Co Ltd were among other top gainers with their share price growing by of over 3 percent each.

On the contrary, shares of Api Power Company Ltd tanked 8.63 percent followed by scrips of Nepal Seva Laghubitta Bittiya Sanstha Ltd which tumbled 7.6 percent. Similarly, share price of ICFC Finance Ltd fell by 3.18 percent. Other top losers of the day were Nabil Equity Fund, Sanima Bank Ltd and Himalayan Distillery Ltd. 

On the news front, Himalayan Distillery Ltd has proposed 21.05 percent cash dividend to its shareholders. Similarly, Machhapuchhre Bank Ltd has reported a 38 percent growth in its net profit in the first quarter of Fiscal Year 2018/19 to Rs 386 million. Development banks, including Lumbini Bikas Bank Ltd, Jyoti Bikash Bank Ltd, and Deva Bikash Bank Ltd, also reported growth in their respective net profits. Besides, a number of other development banks, finance companies and microfinance companies have also published their earnings reports for the first quarter.

ARKS technical analysis indicates the Nepse index forming a doji candlestick on the daily timeframe, suggesting indecisiveness in the market. Moving Average Convergence Divergence has also dropped marginally to negative territory, indicating that further downward movement is possible. However, the index still trends above its immediate support of around 1,215 points. Hence, the activity in the aforementioned level must be closely monitored for possible future movement.

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