Daily Market Commentary

Stocks extend losing run to six sessions

Published On: January 4, 2019 08:01 AM NPT

KATHMANDU: The Nepal Stock Exchange (Nepse) started on a positive note and traded higher in the early trading on Thursday. However, the index pared all its gains by afternoon and ended the last trading day of week in negative territory. At the close, the index posted a loss of 1.56 points to settle at 1178.87 points.

Following the day’s loss, Nepse has turned red in all session of the week. Subsequently, daily turnover remained in the lower side of the range as the exchange recorded total transaction of only Rs 276 million.
On the sectoral front, sub-indices of Life Insurance and Hotel segments posted gains of over 1 percent each. The sub-indices of Non-Life Insurance, Microfinance, Finance and ‘Others’ groups also edged slightly higher. 

However, Hydropower stocks came under pressure as reflected by a drop of 0.52 percent in the group’s sub-index. Similarly, sub-indices of Banking and Development Bank followed suit with a decline of 0.43 percent and 0.42 percent, respectively. 

Nepal Bank Ltd logged the highest turnover of the day. More than Rs 26 million worth of the commercial bank’s shares were traded on the day. Shares of Nepal Doorsanschar Company Ltd followed suit with turnover of Rs 16 million. Nepal Life Insurance Company Ltd and Nepal Life Insurance Company Ltd Promoter Share posted total transactions of over Rs 12 million each. Nepal Credit and Commercial Bank Ltd, National Life Insurance Company Ltd and Nabil Bank Ltd were among other active stocks of the day.

United Modi Hydropower Company Ltd led the list of gainers as it its share price surged by 5 percent. Similarly, shares of Sindhu Bikas Bank Ltd and Ridi Hydropower Development Company Ltd also rose by over 4 percent each. Other gaining scrips include Api Power Company Ltd, Mirmire Laghubitta Bittiya Sanstha Ltd, Samata Microfinance Bittiya Sanstha Ltd and Ngadi Group Power Ltd.

On the other hand, Kalika Laghubitta Bittiya Sanstha Ltd posted a loss of 6.97 percent on the day. Shares of Hathway Finance Company Ltd and Shine Resunga Development Bank Ltd also suffered and saw their share price go down by almost 5 percent each. Nagbeli Laghubitta Bittiya Sanstha Ltd, Ankhu Khola Jalvidhyut Company Ltd, Everest Insurance Company Ltd and Kabeli Bikas Bank Ltd also closed the day lower.

On the announcement front, Kalika Laghubitta Bittiya Sanstha Ltd declared 75 percent right shares for its shareholders. The decision is subject to approval from its upcoming Annual General Meeting (AGM). After the adjustment of previously declared bonus shares and right shares, the paid-up capital of the microfinance company will reach Rs 183 million.

ARKS technical analysis indicates the market forming a small bearish candlestick on the daily timeframe. Following the spree of losses, technical indicators like Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have tilted downward, suggesting bears taking over in the present context. Moreover, traded volumes have dropped significantly in the recent trading days indicating a feeble momentum in the equity market. Hence, cautious trading is suggested in the upcoming sessions.

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