Nepse posts weekly losses despite upbeat earnings

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KATHMANDU, Nov 3: Stocks started the week on a negative note on Sunday with the Nepal Stock Exchange (Nepse) index losing over13 points. The losses carried over to second day of the week with the decline of over 10 points.

Despite trimming some of the losses on Tuesday with the gain of almost 7 points, the index witnessed losses in two subsequent trading sessions. The index lost of over 3 percent and almost 1 percent on Wednesday and Thursday, respectively. Eventually, the index closed the week 20.13 points lower at 1,220.98 points.

The index which closed flat in the previous week, could not manage to continue its upward movement. As a result, the index dropped to as low as 1,215 points in the week. Despite companies publishing hopeful first quarterly reports, investors seemed to lack positive sentiment in the market.

Nonetheless, weekly turnovers showed slight improvement. The weekly turnover increased by 18.89 percent to Rs 1,211 million.

Sensitive index, which gauges the performances of Class ‘A’ stocks, fell 1.64 percent in the week. Sectoral performance indicates most of the sub-indices ending in the red. Only Manufacturing & Processing sub-index managed to eke out gain of 0.67 percent. Shares of Hydropower segment under-performed as its sub-index plunged 3.13 percent. Hotels sub-index also declined 2.74 percent in the week.

Similarly, Microfinance and Banking sectors also struggled as their sub-indices declined by over 2 percent each. Sub-indices of Finance, Non-Life Insurance and Development Banks groups also ended the week lower.

In terms of market activity, shares of Prabhu Bank Limited registered the highest turnover of Rs 72 million. Shares of NIC Asia Bank Ltd were also actively traded with turnover of over Rs. 65 million. Further, over Rs 45 million worth of shares of Life Insurance Co. Nepal Ltd were traded in the week. Janata Bank Nepal Ltd and Global IME Bank Ltd’s scrips recorded turnovers of over Rs 43 million apiece.

At the end of the week, Everest Bank Ltd proposed 20 percent cash dividend for its shareholders. The decision is yet to be approved by its Annual General Meeting (AGM). In other news, Pokhara Finance Ltd has published its first quarterly financial report on Friday. Its net profit jumped to Rs 18.8 million with an increment of 26.64 percent from the previous year.

Similarly, Mithila Laghubitta Bikash Bank Ltd has reported a 140.73 percent increment in its net profit while Mero Microfinance Development Bank Ltd’s net profit rose by 44.10 percent.

AS per the ARKS weekly technical analysis, the market formed a bearish candle stick on a weekly time frame. Consequently, the index closed below its 20 days Exponential Moving Average. Relative Strength Index (RSI) dipping towards the oversold zone also indicates bearish sentiment prevailing. Nonetheless, the market is still trending around its support of 1,215 to 1,220 points. Therefore, given the index trends above this level, a hold strategy is suggested.

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