Daily Market Commentary

Stocks slide further

Published On: June 14, 2019 02:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 14: Local securities traded slightly higher when the bourse opened for trading on Thursday. However, the Nepal Stock Exchange (Nepse) index gave up its gains quickly to trade in red by midday. The benchmark index made some recovery later in the session, but eventually closed the last trading day of the week 2.92 points lower at 1,269.55 points.

The day's decline came after muted trading sessions witnessed in the week. Following series of lackluster trading, the bourse shed around 50 points in the month of June so far. The market has not been able to find any notable ground since the budget for the new fiscal year was unveiled at the end of May. Meanwhile, volume has also seen a significant slump in recent sessions with only Rs 457 million worth of shares changing hands on Thursday.

Almost all traded sectors shed value on Thursday. Only Hotels sub-index managed to close the day higher with an advance of 0.2 percent. Losses came mainly from Finance scrips which dragged the group's sub-index down by 0.82 percent. Manufacturing & Processing and Hydropower sub-indices followed suit and closed the day 0.66 percent and 0.49 percent lower, respectively. All other sectors closed marginally lower on the day.

Sagarmatha Insurance Company Ltd was the top stock on the day as the insurer is closing its shareholder's book on Sunday for convening its Annual General Meeting (AGM). Shares worth more than Rs 30 million of the company were traded on the day. The meeting is due to approve 86 percent stock dividend to its shareholders. Shivam Cements Ltd and Prabhu Bank Ltd were next on the list with turnover of Rs 24 million and Rs 23 million, respectively. Global IME Bank Ltd Promoter Share, Nepal Bank Ltd and NIC Asia Bank Ltd were among other active stocks of the day.

Among gainers, Ankhu Khola Jalavidhyut Company Ltd logged maximum gains on its share price on the day. The hydropower company's share price went up by over 5 percent. Recently-listed Nepal Agro Laghubitta Bittiya Sanstha Ltd also saw its share price jump by 4.82 percent. Naya Nepal Laghubitta Bikas Bank Ltd, Rairang Hydropower Development Company Ltd and Nerude Laghubitta Bikas Bank Ltd also added 3.48 percent, 2.88 percent and 2.70 percent, on their respective share prices.

On the flipside, share price of Prudential Insurance Company Ltd tanked the most and closed 4.68 points lower. Microfinance scrips, including Janautthan Samudayik Laghubitta Bikas Bank Ltd and Unnati Microfinance Bittiya Sanstha, also ended the day lower. Other losing securities include Sagarmatha Insurance Co Ltd, Multipurpose Finance Company Ltd and Joshi Hydropower Development Company Ltd.

In news, IME General Insurance Ltd has announced that it is holding its AGM on July 14. It will close shareholder's book from June 30. The AGM is due to approve the proposal to distribute 5 percent bonus shares to its shareholders.

As per the ARKS technical analysis, the bourse marked another trading day with a bearish candlestick, stretching losses further. Sellers have remained dominant throughout the week as the bearish sentiment continues to persist. Moving Average Convergence Divergence (MACD) has now dipped in the negative territory, confirming continuation of short-term bearish trend. Hence, the index is likely to test the support range at around 1,250-1,260 points.

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