Stocks inch lower in thin trading

Published On: November 4, 2019 07:50 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Local stocks began week's trading on a feeble footing as the bourse traded in red throughout Sunday's trading session. After trading flat in the morning, the equity market came under some pressure and witnessed a slight decline in the latter trading hours. The index ended the day down 6.88 points at 1,139.29 points.

The exchange stretched its post-holiday decline to a second consecutive day. Nonetheless, the recent losses remain trivial with the index still confined within a narrow range. Meanwhile, investors continue to take a back seat over unclear outlook in the secondary market. However, a few commercial banks have begun publishing their first quarter earnings results which will likely play a notable role in determining the market's movement in the coming months. On the day, Sanima Bank Ltd released its financials, reporting a 14% year-to-year growth in its net profit to Rs 594 million. Market activity was subdued on Sunday. Only Rs 176 million worth of securities were traded in the session.

All sectors ended lower barring Mutual Fund segment which edged up by 0.1%. Manufacturing & Processing segment, on the other hand, led the day's decline giving up 1.54%. 'Others' and Non-Life Insurance sectors also suffered and dropped 0.81% and 0.77%, respectively. Meanwhile, Banking sub-index fell 0.64%. Similarly, all other sectors saw modest losses.

Shares of Prabhu Bank Ltd led the list of actives with turnover of over Rs 15 million. Next, Deva Bikas Bank Ltd Promoter Share registered a transaction of Rs 14 million. Mega Bank Ltd saw a total turnover of Rs 8 million followed by Nabil Bank Ltd and Nepal Bank Ltd which logged in turnovers of Rs 6 million and Rs 5 million, respectively.

Among advances, NIC Asia Growth Fund posted the biggest gain of the day. Its unit price jumped 4.52%. Likewise, Barun Hydropower Co Ltd's stock price surged 4.40%. Other energy stocks followed suit. Chilime Hydropower Company Ltd, Panchthar Power Company Ltd and Rairang Hydropower Development Company Ltd all closed over 2% higher. Shares of 

Laxmi Bank Ltd added 1.83% after the bank published upbeat financial performance in the first quarter.

In contrast, Mega Bank Ltd fell 5.44% following its book closure for annual general meeting (AGM) where 11.75% cash dividend is due to be approved. Ankhu Khola Jalvidhyut Company Ltd and Nepal Seva Laghubitta Bittiya Sanstha Ltd's scrips also struggled and tanked over 5% each. Furthermore, United Modi Hydropower Ltd and NMB Microfinance Bittiya Sanstha Ltd both closed 4% lower.

Among major announcements, Nabil Bank Ltd declared 34% dividend for the year 2018/19 including 12% bonus shares and 22% cash payout. Similarly, Laxmi Bank Ltd and Nepal Bangladesh Bank Ltd also made dividend announcements on the day. While the former has proposed 10% bonus shares and 5% cash dividend, the latter will be endorsing 5% bonus shares and 7% cash dividend. All proposals are subject to approval from the respective AGMs.

On the technical front, the index formed a second straight bearish candlestick on the daily time-frame. Despite the decline, the index has continued to trade range bound. Towards the upside, 1,150 points has still acted as a significant resistance, while an immediate support lies at 1,130 points. Technical indicators closed mixed confirming lack of conviction. Hence, further wait and watch stance is suggested in the present context.

This column is produced by ARKS Capital Advisors Ltd
(Views expressed are those of the producer and do not necessarily reflect those of this publication)

Leave A Comment