daily market commentary

Stocks fall for sixth consecutive session

Published On: August 10, 2018 08:39 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The stock market started trading on Thursday on a positive note. Even though the market surged around 2 points initially, the benchmark Nepal Stock Exchange (Nepse) index failed to sustain in the positive side, declining throughout the remaining day. At the end of the week, the index was down by 6.69 points to close at 1,180.63 points.

Shares worth Rs 196 million were traded in the market on Thursday. The total turnover still prevailed below the average mark of Rs 200 million which shows that investors lacks confidence in the equity market due to the absence of any major news to uplift the overall market. 

Majority of the sub-indices shed values on Thursday. Only Trading sub-indices managed to hold on to a gain of 1.06 percent. Life Insurance stocks were the biggest drag with the group’s sub-index dropping 1.75 percent. Hotels sub-index lost 1.68 percent, while Non-life Insurance saw its sub-index fall by 1.2 percent. Likewise, the sub-indices of Hydropower, Microfinance and Banking sectors plunged 1.19 percent, 1.08 percent and 0.33 percent, respectively.

Nepal Life Insurance Company Ltd led the listed companies in terms of transaction amount. Shares worth Rs 31 million of the insurance company were traded in the market on the day. Besides, Support Microfinance Bittiya Sanstha Ltd and Sanima Mai Hydropower Ltd posted turnovers of over Rs 9 million each. Nepal Telecom Ltd, Global IME Bank Ltd and Nepal Investment Bank Ltd were among the active stocks on the day.

Similarly, Arambha Microfinance Bittiya Sanstha Ltd was the biggest gainer of the day as its share price surged by 3.87percent. Furthermore, Salt Trading Corporation, NMB Hybrid Fund L-1 and Rastriya Beema Company Ltd Promoter Share followed as they also saw their unit price surge by 3 percent each. In contrast, Multipurpose Finance Company Ltd logged the worst performance of the day as its share price plunged almost 10 percent. Likewise, share prices of Support Microfinance Bittiya Sanstha Ltd and Khani Khola Hydropower Company Ltd also slid over 6 percent each.

Among the major announcements, four microfinance companies published their financial reports for the fourth quarter of Fiscal Year 2017/18. Unnati Microfinance Bittiya Sanstha Ltd reported a net profit growth of 21.30 percent year-on-year to Rs. 20.56 million. Aarambha Microfinance Bittiya Sanstha Limited also registered a massive increase of 224 percent in its earnings. However, the micro sector lender still is in deficit in terms of reserves. On the other hand, Deprosc Laghubitta Bikas Bank Ltd and Support Microfinance Bittiya Sanstha Ltd’s net profit declined by 9.34 percent and 52.79 percent, respectively.

As per the ARKS technical analysis, the index which has been posting marginal losses for the past few days, dipped over 6 points on Thursday. However, the downtrend continuation is yet to be confirmed as the index has managed to close exactly above its support of 1,180 points. As a result, a slight correction can be expected on Sunday. However, if the index breaches the support of 1,180 points in the coming session a further slump in the market is likely. Meanwhile, Relative Strength Index (RSI) and Moving Average Convergence/Divergence both indicate the momentum slightly shifting toward negative territory.

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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