Daily Market Commentary

Stocks fall, erasing previous day gains

Published On: June 19, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 19: Market turned choppy on Tuesday as the benchmark Nepal Stock Exchange (Nepse) index wavered along with the opening level throughout the day. The index reached as high as 1,263 points in the afternoon but gave ground in the latter trading hours to close 2.23 points lower at 1258.66 points.

Investors had found some respite as Nepse took a breather on Monday, registering modest gains. However, the index gave up almost all of Monday's gains on Tuesday as the market failed to extend gains. The market continued to register series of bland trading sessions as investors have kept from trading actively keeping a hawkish stance for the upcoming monetary policy. Total turnover stood at Rs 359 million.

Most of the sub-indices closed the day in red. Only, Microfinance, Development Bank and Banking scrips edged higher. Meanwhile, losses came mainly from Life Insurance scrips as the group's sub-index fell by 0.82 percent. Manufacturing & Processing, 'Others' and Mutual Fund sub-indices also closed the day 0.79 percent, 0.75 percent and 0.73 percent, respectively, lower. All other sectors closed in red.

Among active securities, Taragaon Regency Hotels Ltd witnessed the highest transaction of the day. More than Rs 42 million worth of the hotel's shares changed hands on the day. The company notified the local bourse on Monday that it was shutting operations until further notice citing protest by staffers. NIC Asia Bank Ltd witnessed turnover of over Rs 20 million worth of shares, followed by Shivam Cements Ltd and Nepal Bank Ltd which registered turnover of Rs 19 million and Rs 18 million, respectively. Shares of Prabhu Bank Ltd, Nepal Credit and Commerce Bank Ltd and Agriculture Development Bank Ltd were also traded actively on the day.

Newly-listed shares of Gurans Laghubitta Bittiya Sanstha Ltd and Ganapati Microfinance Bittiya Sanstha Ltd both rallied by almost 7 percent each. Likewise, share price of Nepal Agro Laghubitta Bittiya Sanstha Ltd surged by 5 percent. National Microfinance Bittiya Sanstha Ltd, Mountain Hydro Nepal Ltd and Rairang Hydropower Development Company Ltd were among other top advances of the day.

In contrast, shares of Samata Microfinance Bittiya Sanstha Ltd, Panchakanya Mai Hydropower Ltd and Nepal Hydro Developers Ltd came under substantial pressure as their respective prices tanked by over 5 percent each. Other losing securities include Union Hydropower Ltd, Siddhartha Insurance Ltd and Civil Laghubitta Bittiya Sanstha Ltd.

In corporate space, Multipurpose Finance Company Ltd has announced that it will close shareholder's book from June 26 for the purpose of issuing 865 percent right shares to its shareholders.

ARKS technical analysis indicates the market forming a small bearish candlestick on the daily timeframe. The market volume has stayed on the lower side of the spectrum suggesting lack of any significant momentum. The index is now trending in the support zone of 1,250-1,260 points and a move toward either side will suggest further possible direction of the securities market. Overall, sentiment remains fairly bearish in the present context.

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