Daily Market Commentary

Stocks unchanged as investors look past corporate earnings

Published On: May 9, 2019 03:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 9: The Nepal Stock Exchange (Nepse) index climbed above 1,300 points briefly in the morning session on Wednesday, but gave up all its gains by mid-day. Though the benchmark index crossed the psychological mark again in the afternoon, it shed values toward the close to end the day 3.68 points lower at 1,297.60 points.

Stocks logged a muted performance on Wednesday as investors seemed to digest recent earnings reports of listed companies. Hence, the index has continued to trade range bound and waver near the psychological 1,300-point mark. Market participation also dropped on the day as the bourse saw transactions of only Rs 508 million on Wednesday compared to Rs 729 million a day earlier.

Most of the sectors ended the day lower. Only Manufacturing & Processing, Trading and 'Others' sub-indices closed the day in green. On the losing front, Hotels and Hydropower stocks struggled as their respective sub-indices declined by over 1 percent each. Sub-indices of Banking, Development Bank and Microfinance segments followed suit. All other sub-indices edged lower.

Shares of Civil Bank Ltd were actively traded on the day as Rs 55 million worth of the commercial bank's shares changed hands on the day. Next, shares worth Rs 49 million of Mega Bank Ltd were traded on the day. The commercial bank reported a significant 131 percent year-on-year increase in its net profit as per its financial report for the third quarter of FY2018/19. Shivam Cements Ltd, Citizen Investment Trust and Nepal Credit and Commercial Bank Ltd posted turnovers of Rs 41 million, Rs 30 million and Rs 22 million, respectively.

Among gainers, share price of Himalayan Distillery Ltd hit the upper circuit for the second day in a row. Unit prices of Nabil Equity Fund and Civil Laghubitta Bittiya Sanstha Ltd also went up by 4 percent in the session. Similarly, share price of Suryodaya Laghubitta Bittiya Sanstha Ltd, Bottlers Nepal (Tarai) Ltd and United Modi Hydropower Ltd appreciated by over 3 percent each.

Share price of Multipurpose Finance Company Ltd, on the other hand, tanked 9 percent. As per the company's earnings report, its net profit slumped by over 40 percent in the third quarter. Subsequently, Taragaon Regency Hotel Ltd, Panchthar Power Company Ltd and First Micro Finance Laghubitta Bittiya Sanstha Ltd also saw their share prices go down by over 4 percent each. Sindhu Bikash Bank Ltd, Arun Kabeli Power Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha were among other top losing securities of the day.

In corporate space, Sanima Mai Hydropower Ltd reported a modest 5 percent year-on-year growth in its net profit as per its financials for the third quarter. Its net profit stands at Rs. 229 million with earnings per share of Rs 13.18.

As per ARKS technical analysis, the market formed a spinning top bearish candlestick on the daily timeframe, reflecting lack of conviction in the secondary market. Technical indicators, meanwhile, suggest subdued momentum in the present context. Further, as the market is trending near the crucial 1,300-point mark, investors are suggested to take a watchful stance unless the market shows a significant movement toward either side with notable transaction volume.

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