KATHMANDU, Aug 11: The stock market continued its bearish movement on all five trading days this week. The Nepal Stock Exchange (Nepse) index started with meager decrement of 1.43 points on the first trading day. Subsequently, the index posted the modest decline in following three sessions. Further, in final trading day of the week, the index shed more than 6 points. At the end, the stock closed at 1,180.63 points with 10.68 points or 0.9 percent decline in the review period.
Passive market participation was observed throughout the week as weekly turnover decreased by 14.68 percent. As a result, the bourse posted a year-till-date low turnover of Rs. 918 million. The series of lackluster trading sessions clearly depicts lack of confidence among the investors. Investors still seem to refrain from entering into transactions following two years of continuous decline in the Nepalese stock market.
Class 'A' stocks also followed the broader market with the Sensitive Index declining 2.02 points or 0.9 percent in the review period. Major sub-indices turned in mixed performance posting moderate moves to either side. Significant strength was visible among trading stocks as its sub-index surged 2.02 percent. Sub-indices of Hotels, Others and Development Bank sectors also moved towards positive territory.
On the other hand, Life Insurance stocks were the biggest drag in the week as its sub index lost almost 3 percent. Next on the list, Manufacturing/Processing sub index also shed 2.48 percent. Likewise, sub-indices of hydropower, non-life insurance and microfinance stocks slumped over 1 percent each. Banking sub-index also closed the week 0.79 percent lower.
As per the market activity, shares of Progressive Finance Ltd Promoter Share were traded the most as they registered a turnover of Rs. 59 million. It was followed by Nepal Life Insurance Company Ltd posting a turnover of over Rs. 41 million. Likewise, shares of First Microfinance Development Bank Ltd and Chhimek Laghubitta Bikas Bank Ltd recorded transactions of Rs. 30 million apiece. Sanima Mai Hydropower Ltd, Everest Bank Ltd, Nepal Investment Bank Ltd and Standard Chartered Bank Ltd were the other active stocks in the week.
On the economic front, Nepal Rastra Bank (NRB) issued a notice on Wednesday allowing commercial banks to bring in loans in Indian currency from Indian banks and financial institutions. However, NRB has limited the loans to 25 percent of core capital of borrower bank. Such loans can only be utilized for lending to predetermined sectors like infrastructure, agriculture, and tourism. This policy aims to address the shortage of loanable funds in the financial market.
As per the ARKS technical analysis, Nepse experienced the downfall in all trading days of the week with dismal volume. However, the index is trending within the range of 1,180 to 1,200 points which can be seen as a consolidation zone. A breakout in either direction with substantial turnover can indicate possible course for the market.
This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com
(Views expressed are those of the producer and do not necessarily reflect those of this publication)