Stocks stretch losing run

Published On: February 14, 2019 09:46 AM NPT

KATHMANDU: Stocks witnessed upward trend in the initial trading hour on Wednesday. However, the benchmark Nepal Stock Exchange (Nepse) index succumbed to selling pressure and pared its initial gains by midday. Subsequently, the index traded in red for the remaining trading hours to close 7.11 points lower at 1,121.08 points. 

The day's decline saw the index tumble further near its three-year low of 1,120 points. The index is currently at the lowest point since the beginning of 2019. Lack of enthusiasm to long positions remains visible among investors in the absence of major news on the financial front. The bourse has also continued to register low turnover sessions. Over Rs 238 million worth of shares changed hands on Wednesday. 

All traded sectors, except Manufacturing & Processing sub-group whose sub-index jumped up by 2.37 percent, ended the day in red. Life Insurance scrips struggled as reflected by a slump of 1.68 percent in its sub-index. Trading sub-index also closed over 1 percent lower. Further, sub-indices of Hydropower, Microfinance and Finance segments went down by 0.92 percent, 0.84 percent and 0.7 percent, respectively. The heavyweight Banking sub-index also posted a loss of 0.69 percent.

Citizen Investment Trust was the most actively traded scrip on the day with total transactions of over Rs 13 million. Nepal Bank Ltd's shares followed suit with turnover of over Rs 12 million. Prabhu Bank Ltd and Upper Tamakoshi Hydropower Ltd also posted turnover of over Rs. 9 million each. Nepal Life Insurance Company Ltd, Nepal Credit and Commercial Bank Ltd and Machhapuchhre bank Ltd were among other active stocks of the day.

Shares of recently-listed Chautari Laghubitta Bittiya Sanstha Ltd continued its rally and hit the upper circuit of 10 percent. Similarly, Unilever Nepal Ltd snapped its losing streak as its share price jumped up by 6 percent. 

Meanwhile, shares of Kankai Bikas Bank Ltd also closed 4.27 percent higher. Other top gaining securities of the day include Sanima Equity Fund, Corporate Development Bank Ltd and Sindhu Bikash Bank Ltd.

Among losing securities, Naya Nepal Laghubitta Bikas Bank Ltd turned the worst performance of the day as its share price tanked 10 percent. Share price of Jebils Finance Ltd fell by more than 5 percent. Meanwhile, energy stocks including Khanikhola Hydropower Company Ltd and Kalika Power Company Ltd registered loss of over 4 percent each. Share prices of Gurans Life Insurance Company Ltd, Laxmi Laghubitta Bittiya Sanstha Ltd and Nepal Insurance Company also fell down.

On news front, Asian Life Insurance Company Ltd has received approval from the Securities Board of Nepal (Sebon) to issue 60 percent right shares to its shareholders. After this, the life insurer will meet its minimum capital requirement of Rs 2 billion. 

Among companies publishing their earnings report on Wednesday, Nagbeli Laghubitta Bikas Bank Ltd reported a 9 percent slump in its net profit. Similarly, net profit of Taragaon Regency Hotels Ltd shot up by 37 percent to Rs 214 million in the second quarter FY 2018/19.

As per ARKS technical analysis, the market extended its losses with the formation of a bearish candlestick on the daily timeframe. Technical indicators also suggest a firm downtrend in action in the present context. The breach of 1,120-point support level might see the index fall further to the psychological level at 1,100 points.

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