Weekly market commentary

Stocks close the week lower, dragged by most of the traded sectors

Published On: June 8, 2019 08:51 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 8: The equity market remained under pressure throughout the week as the Nepal Stock Exchange (Nepse) index registered losses in all trading sessions of the week. 

The benchmark index slumped 13.79 points and 12.84 on Sunday and Monday, dragging the index below 1,300 points mark. Tuesday was marked by a modest loss of 3.56 points, while the market remained closed on Wednesday on the occasion of Eid-ul-Fitr. 

The market extended losses on Thursday as the index further dropped 4.69 points bringing the weekly loss tally to 34.88 points or 2.64 percent. Nepse ended the week at 1,284.59 points.

With the week's decline, the bourse witnessed its biggest weekly loss of the year 2019 as most of the sectors retraced firmly in the week. Little to no significant impact was observed in the secondary market despite the government's positive approach towards the capital market as presented in the budget for the Fiscal Year 2019/20. 

The drop in the index was also accompanied by a decrease in market participation. The exchange recorded a total weekly turnover of Rs 2,756 million against Rs 4,332 million in the preceding week. 
Class 'A' stocks also reflected the broad market's movement with the Sensitive Index giving up 2.58 percent. Most of the traded sectors witnessed weakness, barring Finance and Hotels sub-groups. The corresponding sub-indices added 1.79 percent and 1.20 percent. Hydropower sub-index witnessed major decline and tanked 4.16 percent. 

Trading sub-index, similarly, lost 4.04 percent. Sub-indices of Life Insurance, Microfinance, and Non-Life Insurance scrips followed suit and closed over 3 percent lower each. Market heavyweight banking stocks also gave considerable ground in the week with the group's sub-index falling 2.83 percent. 

Shares of Shivam Cements Ltd, which has witnessed major rally in the previous months, continued to trade actively. Over Rs 353 billion worth of the cement manufacturer's shares changed hands in the week on review. 

Prabhu Bank Ltd, secondly, registered a total turnover of Rs 219 billion. Premier Insurance Co Ltd's shares also remained active after the non-life insurer announced 79.79 percent bonus shares and 4.20 percent cash dividend on Friday last week. Nepal Bank Ltd, NIC Asia Bank Ltd and Upper Tamakoshi Hydropower Ltd were among the other top turnover stocks. 

On the corporate front, Taragaon Regency Hotel Ltd held its 22nd Annual General Meeting (AGM) on Friday. Its key agenda included endorsement of 12.63 percent cash dividend to its shareholders. 
In other news, Nepal Investment Bank Ltd is floating '10.5% Nepal Investment Debenture 2082' from Friday. The issue, which is worth Rs 2 billion, has a maturity period of 7 years, and offers 10.5 percent annual interest. 

ARKS weekly technical analysis indicates the market forming a bearish candlestick erasing previous week gains. Sellers remained dominant in the week as the market reverted from its immediate resistance at around 1,320 points. Further, Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also indicate market losing momentum. Hence, further short term downfall can be expected in the coming weeks. 


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