daily market commentary

Stocks on losing spree

Published On: July 10, 2018 09:44 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: The benchmark Nepal Stock Exchange (Nepse) index moved notably lower during early trading on Monday. Despite the market making slight recovery in the afternoon session, the index continued its slump in the final trading hour, closing almost 18 points lower. The index ended the day at 1,206.43 points.

After ending the previous session flat, Nepse continued its bearish tendency observed since last two months. The decline came as investors seemed to look past the monetary policy announcement. Total turnover of Rs 410 million was recorded on the day.

Most of the sub-indices, except Manufacturing & Processing, and Trading, ended the day in negative territory on Monday. Reflecting the weakness in insurance stocks, Insurance Sub-index shed 2.09 percent. Banking Sub-index also went down by 1.58 percent. Similarly, Hydropower, Microfinance, Development Bank and Hotels sub-indices also dropped over 1 percent each.

Shares of Everest Insurance Company Ltd was the forerunner in terms of turnover as over as the company's shares worth Rs 148 million changed hands on Monday. Next on the list were Nepal Investment Bank Ltd and Nabil Bank Ltd which recorded turnovers of Rs 12 million and Rs 10 million, respectively. Nepal Life Insurance Company Ltd and Garima Bikas Bank Ltd Promoter Shares were other active stocks of the day.
Kankai Bikas Bank Ltd was the biggest gainer of the day as its shares price surged 4.69 percent. NIBL Pragati Fund and Rairang Hydropower Development Company Ltd also saw their share price go up by 4 percent each. NMB Microfinance Bittiya Sanstha Ltd, NMB Sulav Investment Fund-1 and Laxmi Equity Fund followed suit. On the other hand, shares of Shine Resunga Development Bank Ltd fell by 6.67 percent. Civil Laghubitta Bittiya Sanstha Ltd, Nepal Hydro Developer Ltd, Nerude Laghubitta Bikas Bank Ltd and Everest Insurance Company Ltd also saw their share prices go down by over 5 percent each.

In the news, Ramesh Aryal, under secretary of Ministry of Finance has been appointed as the new Chief Executive Officer (CEO) after the government showed Chandra Singh Saud the door. Synergy Finance Ltd commenced 25 percent rights issue on Monday. After the issue, paid-up capital of the finance company will reach Rs 593 million. Further, Progressive Finance Ltd is closing its book from August 8 for 281 percent rights issue. The issue will take the finance company's paid-up capital to Rs 800 million.

As per the ARKS technical analysis model, the market added to losses with the formation of a bearish candlestick on a daily time frame. Momentum indicators also suggest that the market is losing steam and the index is likely to test the support at 1,200-point level.

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