Daily Market Commentary

Stocks end turbulent year in the red

Published On: January 1, 2019 09:53 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stocks began the last trading day of the year on a slightly positive note and traded higher in early trading on Monday. The Nepal Stock Exchange (Nepse) index, however, pulled back slightly in the afternoon but maintained a negative bias throughout the remaining session. As a result, the index posted loss of 17.26 points to close 2019 at 1,187.28 points. 

Daily turnover also remained in the lower side of the spectrum as the local bourse recorded total transactions of Rs 400 million.

The benchmark index, which had opened first trading day of 2018 at 1,390.58 points, witnessed significant volatility during the year. The equity index reached its yearly high on April 22 when it closed at 1,438.49 points. 

On the other hand, the index fell to its 3-year low of around 1,120 points in early December. The index has now closed more than 200 points below its year's opening level. Hence, bears remained significantly dominant in 2018, despite the market making a noteworthy recovery in December. 

Most of the major sub-indices also moved in tandem with the broader market. Only, Hydropower, Manufacturing & Processing and Finance sectors managed to eke out marginal gains on the day. Insurance scrips were among the biggest losers of the day. 

The sub-index of Non-life Insurance segment slumped 2.75 percent, while Life Insurance group saw its sub-index fall by 2.45 percent. Microfinance and Banking sectors witnessed considerable weakness as the groups' respective sub-indices dropped 1.67 percent and 1.43 percent. Hotels and 'Others' sub-indices also registered a loss of over 1 percent on Monday.

Mainly insurance scrips, which witnessed substantial surge in the past weeks, remained active on the day amid profit booking by traders. National Life Insurance Company Ltd posted the highest turnover of over Rs 28 million. Besides, Nepal Bank Ltd and Nepal Life Insurance Company Ltd logged turnovers of over Rs 23 million each. Shares of Chhimek Laghubitta Bikas Bank Ltd, NMB Bank Ltd and Lumbini General Insurance Company Ltd were also traded actively on the day.

Among advances, shares of Jebils Finance Ltd's posted the highest gain on Monday. The Class 'C' financial institution saw its share price surge by almost 5 percent. Shangrila Development Bank Ltd and Kalika Power Company Ltd followed suit, adding over 4 percent each on their share prices. Meanwhile, Arun Kabeli Power Ltd registered a gain of 3.21 percent. Additionally, mutual fund units were among other gaining securities.

In contrast, Mahila Sahayatra Microfinance Bittiya Sanstha Ltd logged the worst performance of the day as its share price tanked 8 percent prior to its book closure. 

The microfinance company has announced cash dividend of Rs 8 per share to its shareholders. Purnima Bikas Bank Ltd also registered a decline of over 7 percent.

Himalayan Bank Ltd, Janata Bank Ltd and NMB Microfinance Bittiya Sanstha Ltd saw their share prices go down by 6.8 percent, 5.97 percent and 4.85 percent, respectively.

ARKS technical analysis indicates the market extending its losing run for a third straight day, erasing almost all of the gains that came on last Wednesday. 

Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicate the bullish momentum subsiding slightly. Further, the market's breach of 1,200-point mark suggests further downfall plausible in the short run. On the downside, a strong support stays at around 1,165-point level.

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