Longest Nosedive Yet for Secondary Market

As expected, the books closing of financial institutions dragged Nepse down to the lowest yet in 2009.

All key market propellors -- commercial banks, development banks, financial institutions and hydropower companies -- lost this week to pull Nepse by a whopping 55.61 points to 614.79 points from Sunday morning's opening of 660.40 points.

The hotels sub-group that did not see its shares traded while manufacturing sub-group gained by 4.41 points to reach 438.35 points from Sunday morning's opening of 433.94 points.

Unilever Nepal Ltd's 10-unit shares that were traded at Rs 4,346 per unit -- making it dearer by Rs 85 per unit -- pushed up the manufacturing sub-group by 4.41 points.

Unilever Nepal has recommended Rs 450 cash dividend -- Rs 400 normal dividend and Rs 50 as commemorative dividend on the occasion of the completion of its 15 years of commercial production in Nepal -- from the profit of the last fiscal year when it registered a RS 2625.8 million turnover. The company also posted Rs 444 million net profit (after tax). It registered Rs 482.29 Earning Per Share (EPS) and 64 per cent Return on Equity (RoE) in the fiscal year 2008-09.

Though the week started in the green, gaining 2.17 points to 662.57 points on Sunday, it plunged by a whopping 55.61 points during the week.

Currently, banks and financial instituions dominate the secondary market and two institutions -Standard Chartered bank Nepal and Nabil Bank -- are dominant players in the movement of Nepse, putting the secondary market under `concentration' risk. Nabil Bank's books closing -- on Tuesday -dragged Nepse down by 27.42 points but the bank topped the chart in terms of transaction amount with Rs 67.83 million. Standard Chartered Bank Nepal followed with Rs 58.42 million, and Bank of Kathmandu (with Rs 36.49 million), Standard Finance (with Rs 34.99 million) and Nepal SBI Bank (with Rs 18.36 million) managed to come in the top five slot, respectively. In terms of number of share units traded, Standard Finance topped the chart with 1,35,000-unit shares changing hands while in terms of number of transactions Citizens' Bank International topped the chart with 407 transactions.

The transaction amount increased by 40.08 per cent to Rs 483.89 million against last week's fall of 32.63 per cent. Group-A companies contributed 70.71 per cent as against last week's 67.75 per cent whereas the 78-scrip sensitive index -- a barometer of Group-A companies -- lost a hefty 16.20 points to drop to 157.42 points.

The float index -- calculated on the basis of real transactions -- also slid down by 5.14 points to drop to 58.53 points from Sunday morning's opening of 63.67 points.