Daily Market Commentary

Stocks extend losses as Nepse makes new 52-week low

Published On: November 27, 2018 08:46 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 27: Stocks came under pressure throughout Monday's session. The Nepal Stock Exchange (Nepse) index which traded slightly higher in the beginning, suffered in the latter trading hours. The index fell over 4 points till mid-session. Despite a modest recovery in the afternoon, the benchmark index dropped further to 1,160.28 points posting a daily loss of 6.35 points.

Stock stretched its losing streak to a third consecutive session while the Nepse index hit a new 52-week closing low. As of Monday's close, the index is now off 25 percent from its 52-week high reached in November last year. Amid the sustained downtrend, sellers dominated the market on the day as the bourse registered a total turnover of over Rs 308 million.

Most of the major sectoral indices ended the day lower, barring Finance and 'Others' segments' sub-indices. Insurance stocks were the major drag of the day as sub-indices of Non-Life Insurance and Life Insurance stocks dropped 1.66 percent and 1.27 percent respectively. Micro-sector lenders also posted a significant move to the downside as the group's sub-index sank 1.11 percent. Meanwhile, Hotels sub-index declined 0.74 percent, while Banking sub-index posted a loss of 0.47 percent. 

In terms of stock wise turnover, shares of NMB Bank Ltd continued to lead the list of actives. More than Rs. 22 million worth of the class 'A' bank's shares were traded in the exchange. Next, Global IME Bank Ltd's scrips posted a total transaction of Rs. 14 million followed by shares of Nirdhan Utthan Laghubitta Bittiya Sanstha Ltd and Nepal Telecom Ltd which registered turnovers of Rs. 12 million apiece. Everest Bank Ltd, Prabhu Bank Ltd and Nepal Life Insurance Company Ltd were the other active stocks. 

Among the gainers, stocks of Nepal Hydro Developers Ltd posted the biggest percentage gain of 4.48 percent. Progressive Finance Ltd also surged 4 percent on Monday. Similarly, shares of Nadep Laghubitta Bittiya Sanstha Ltd climbed 3.84 percent. The microfinance reported a 13 percent year-on-year growth in its net profit as per its first quarterly financials. NMB Sulav Investment Fund-1 and Citizen Investment Trust were among other advances, with gains of over 3 percent each.

Microfinance scrips, on the other hand, dominated the list of declining scrips. Shares of Nepal Seva Laghubitta Bittiya Sanstha Ltd, NMB Microfinance Bittiya Sanstha Ltd and Mirmire Laghubitta Bittiya Sanstha Ltd logged in losses of 5.65 percent, 5.63 percent and 4.35 percent, respectively. National Hydropower Company Ltd also slumped 4.05 percent in the session. Shares of Shikhar Insurance Company Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd followed suit as their respective share prices fell almost 4 percent each. 

In the news, the initial public offering (IPO) shares of Samudayik Laghubitta Bittiya Sanstha Ltd were allotted to general public on Monday. 27,300 applicants were allotted 10 shares each using lottery method. Further, NIC Asia Bank Ltd has set its book closure date on December 5 for the purpose of carrying out its annual general meeting (AGM). The respective AGM is due to approve 10 percent stock dividend to the bank's shareholders. 

ARKS technical analysis indicates Nepse index breaching its support of 1,180 points on Sunday's session and further continuing its downfall. Relative Strength Index (RSI) has dipped further in the oversold territory indicating bears are in significant control. Hence, investors are suggested to refrain from taking significant long positions in the current juncture unless a sustainable sign of reversal is witnessed in the bourse.

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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