Daily Market Commentary

Turnover falls below Rs 200m as Nepse closes flat

Published On: February 13, 2019 11:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU: Stock traded higher in morning trading on Tuesday as the Nepal Stock Exchange (Nepse) index added more than 3 points by midday. However, the index erased all its gains to end the day 0.67 points lower at 1,128.19 points.

The local bourse failed to add to its previous day's gains as investors continued to fret over lack of any clear signs regarding plausible direction of Nepse. Hence, the market witnessed a significant drop in activity as the daily turnover dropped below Rs 200 million. 

Investors' indecision was also reflected by major sub-indices as the traded sectors turned in mixed performance. Major gains came from Manufacturing & Processing and Trading scrips with their respective sub-indices adding more than 1 percent on the day. Similarly, sub-indices of Finance, Hydropower, Non-life Insurance and Life Insurance scrips also went up marginally. On the flip side, 'Others' sub-index slipped by 0.72 percent followed by Development Bank which saw its sub-index go down by 0.57 percent. Sub-indices of Hotels, Microfinance and Banking stocks also inched lower.

Prabhu Bank Ltd Promoter Shares were traded the most on Tuesday with total transactions of over Rs 31 million. Next on the list of actives stocks were Upper Tamakoshi Hydropower Ltd and Prabhu Bank Ltd which logged turnover of over Rs 8 million each. Other active scrips of the include Nepal Credit and Commercial Bank Ltd, Machhapuchhre Bank Ltd and Nepal Life Insurance Company Ltd which recorded transactions of more than Rs 6 million each. 

Considerable strength was visible among shares of Jebils Finance Ltd as its price surged by 7.63 percent. Shares of Chautari Laghubitta Bittiya Sanstha Ltd and Bottlers Nepal (Tarai) Ltd also closed firmly in the positive territory with advances of over 4 percent each. Laxmi Laghubitta Bittiya Sanstha Ltd, Ankhu Khola Jalavidhyut Company Ltd and Butwal Power Company Ltd were among other top advances of the day with gains of over 3 percent apiece.

Mahalaxmi Bikas Bank Ltd, on the other hand, was the biggest loser of the day as its share price was down by 3.49 percent. Khanikhola Hydropower Company Ltd closely followed with a loss of 3.37 percent. Other energy sector scrips followed suit with share prices of Radhi Bidyut Company Ltd and Hydroelectricity Investment and Development Company Ltd going down by 3.10 percent and 2.89 percent, respectively. Gurkhas Finance Ltd, Surya Life Insurance Company Ltd and Synergy Power Development Company ensued, as their respective share prices closed over 2 percent lower.

Among companies publishing financials for the second quarter of FY2018/19, Nepal Telecom Company Ltd reported a 15 percent year-on-year decline in its net profit. The only listed telecom company's net profit stands at Rs 6,341 million. Among commercial banks, Standard Chartered Bank Ltd's net profit grew by 6.79 percent to Rs 1,145 million, while Civil Bank Ltd's earnings jumped up by 49.79 percent to Rs 359 million. Further, Butwal Power Company Ltd's net profit increased by over 22 percent. However, net profit of Chilime Hydropower Company Ltd slumped by over 13 percent year-on-year in the second quarter.

ARKS technical analysis indicates the market lacking significant conviction with a doji candlestick formation on the daily time-frame. The overall sentiment seems fairly bearish with investors refraining from taking significant long positions. Relative Strength Index (RSI) is trending in the oversold territory, suggesting lack of substantial momentum in the bourse. Hence, the market is yet to show a sign of recovery at this juncture.

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