Daily Market Commentary

Trading volume dips as Nepse closes unchanged

Published On: May 28, 2019 03:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 28: After initially showing lack of direction in the first half of Monday's trading session, the benchmark Nepal Stock Exchange (Nepse) index rallied more than 7 points in the afternoon.

Nonetheless, stocks failed to sustain its gains before pulling back to the opening level to close the day essentially flat. The equity index settled at 1,302.96 points – up a meager 0.34 points against Sunday's close.

After falling for two straight days, the bourse turned in relatively lackluster session as investors seemed less enthused to take major positions ahead of the budget announcement. Consequently, dry trading was experienced in the day with a turnover of only Rs 519 million compared to Rs 626 million in the session earlier.

On the sectoral front, most of the traded segments advanced, barring Banking and Insurance sub-indices which edged slightly lower. Mutual Fund sub-index, on the flipside, jumped 4.62 percent followed by sub-index of Manufacturing & Processing stocks which registered a gain of 1.45 percent. 'Others', Hydropower and Finance sub-indices also eked marginal gains. Besides, all other sub-indices closed the day slightly higher.

Among actives, shares of Shivam Cements Ltd registered the highest turnover of Rs 73 million. Next, Prabhu Bank Ltd posted a total transaction of Rs 64 million. Subsequently, Nepal Bank Ltd, Upper Tamakoshi Hydropower Ltd and Agriculture Development Bank Ltd saw turnovers of Rs 26 million, Rs 19 million and Rs 18 million, respectively.

On the gainers front, Sparsha Laghubitta Bittiya Sanstha continued its rally and hit the upper circuit of positive 10 percent. Karnali Development Bank Ltd also surged 8.33 percent on the day followed by Gurkhas Finance Ltd which shot up by 7.21 percent.

Mutual Fund units followed suit as Sanima Equity Fund, NMB Hybrid Fund L-1 and Siddhartha Equity Fund climbed 6 percent each.

Conversely, hydropower stocks led the list of decliners. Synergy Power Development Ltd and Chhyangdi Hydropower Ltd registered losses of 8 percent and 7.34 percent, respectively. Similarly, Ankhu Khola Jalavidhyut Company Ltd slumped 4.94 percent. Reliance Finance Ltd, Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd and NMB Microfinance Bittiya Sanstha Ltd were among other losing securities.

Panchakanya Mai Hydropower Ltd published its third quarterly earnings reports on the day. The hydropower company has reported a net loss of over Rs 39 million compared to Rs 18 million in the corresponding quarter previous year. In other news, Everest Insurance Company is floating 300 percent right shares from May 28 for the purpose of meeting the minimum regulatory standard of Rs 1 billion paid up capital.

ARKS technical analysis indicates indecision in the market as reflected by a doji candlestick formation in the day. Momentum indicators including Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), meanwhile, suggest bears slightly dominant in the present scenario.

Nonetheless, the market is likely to trade range bound before the budget announcement with dismal volume. Hence, investors are suggested to refrain from taking any significant positions in the equity market in following sessions.

This column is produced by ARKS Capital Advisors Ltd.

(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)


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