daily market commentary

Stock rout continues despite increased activity

Published On: August 24, 2018 07:57 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks continued their losing streak as the benchmark Nepal Stock Exchange (Nepse) index closed lower for fifth straight day. The bourse witnessed lack of strength since the beginning of Thursday’s trading. Failing to stay above the psychological support level of 1,180 points, the index lost 3.92 points to close at 1,178.50 points in the last trading day of the week.

With the decline experienced on Thursday, Nepse index recorded losses in all trading sessions of the week. Investors seemed to look past positive earnings reports published by market heavyweight commercial banks in the previous weeks. Nonetheless, market activity showed improvement as total turnover increased to Rs 277 million, compared to Wednesday’s Rs 169 million.

Sectoral performances reflect the broader market as most of the major sub-indices ended the day in red. Only ‘Others’ and Development Bank’s sub-indices posted gains. Manufacturing & Processing stocks were the biggest drag of the day as the segment’s sub-index plunged over 2.49 percent. Hydropower sub-index also shed over 1 percent on the day. Further, sub-indices of Life Insurance, Non-life Insurance and Banking groups fell by 0.69 percent, 0.48 percent and 0.35 percent, respectively.

NMB Bank Ltd was the most actively traded stock on Thursday as over 11 million units of its Further Public Offering (FPO) shares were listed on the stock exchange on Wednesday. Over Rs 49 million worth of shares of the commercial bank changed hands on the day. Further, Rs 31 million worth of shares of NLG Insurance Company Ltd were traded on Thursday. Meanwhile, Janata Bank Nepal Ltd, Nepal Life Insurance Company Ltd and NIC Asia Bank Ltd saw turnovers of Rs 10 million, Rs 8 million and Rs 7 million, respectively. 

Mutual fund units led the list of advances on Thursday as unit prices of NIBL Samriddhi Fund 1 and Laxmi value Fund 1 surged by 6.09 percent and 4.46 percent, respectively. NIBL Samriddhi Fund 1 has announced cash dividend of 12 percent to its unit holders. Further, share price of Citizen Investment Trust climbed almost 4 percent on the day. Shares of Nepal Seva Laghubitta Bittiya Sanstha Ltd and Shrijana Finance Ltd also rose over 3 percent each.

On the other hand, share price of Unilever Nepal Ltd fell by the highest 4 percent. Development Bank shares followed suit as Saptakoshi Development Bank Ltd and Kankai Bikas Bank Ltd shed over 3 percent each. The other top losing scrips of the day include Agriculture Development Bank Ltd, NMB Bank Ltd and Grameen Bikas Laghubitta Bittiya Sanstha Ltd.

On news, shares of Nadep Laghubitta Bittiya Sanstha Ltd opened for trading on Thursday. The micro sector lender also published its earnings report for the fourth quarter of Fiscal Year 2017/18 on the day, reporting a 32.74 percent year-on-year decline in its net profit. Its share price closed at Rs 597 per unit.

As per the ARKS technical analysis, the market persisted in its losing rung with the formation of a bearish candlestick for a fifth straight day. Consequently, the index sank below the 1,180-point level. Technical indicators also suggest lack of momentum in the market of late. If the index fails to retrace above the aforementioned level, further short-term downtrend can be expected.

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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