Nepse index down 4.46 points

The Nepal Stock Exchange (Nepse) index went down by 4.46 points this week. The benchmark index, which opened at 583.76 points on Sunday, closed at 579.30 points on Thursday - the last trading day of the week. Stock analysts have termed marginal drop in Nepse index as market correction after gains over the past few weeks. The Nepse index had increased remarkably after the Dashain festival. Experts had attributed Nepse´s journey into the green zone to positive political developments for the Constituent Assembly (CA) election which buoyed investors´ confidence. Gunanidhi Bhusal, managing director of Aryatara Investment & Securities, predicted Nepse index to post steady gains in the coming weeks. Some banks and financial institutions are expected to announce their first quarter report in the coming weeks and it is expected to create some fluctuation in share prices. A total of 2.01 million units of shares of 123 companies worth Rs 736.6 million were traded through 9,723 transactions this week. “The major fluctuation was seen in the Hotel group after the Soaltee Hotels Limited announced 40 percent bonus shares and 12.63 percent cash dividend to its shareholders this week,” added Bhusal. The Hotels group was the biggest gainer of the week as its sub-index gained a whopping 94.21 points to close at 891.56 points on Thursday. Similarly, the sub-indices of the Manufacturing and Insurance groups increased by 27.71 and 9.92 points, respectively, to settle at 913.40 and 1,369.76 points respectively. The Finance and Development Banks sub-indices were also up 3.64 and 1.44 points to close at 278.44 and 302.86, respectively. However, Hydropower and Commercial Banks ended the week in the red zone. The Hydropower sub-index went down by 12.28 points to close at 1386.20 points, while the Commercial Banks sub-index shed 11.64 points to settle at 553.75 points. The sub-indices of Trading and Others groups remained unchanged over the week.

Nepse halts stock trading of eight companies

NEPAL Stock Exchange (Nepse) has halted share trading of eight listed companies after they failed to clear the licence renewal fee on time. The companies are Bottlers Nepal (Tarai), National Hydropower, Kanchan Development Bank, Multipurpose Finance, Everest Insurance, Himalayan Finance, Shreeram Sugar Mills and Nepal Film Development Company. The deadline for renewing the licence for these companies ended in mid- October. Himalyan Finance has been declared crisis-ridden by the Nepal Rastra Bank, while the Insurance Board recently took over Everest Insurance for not holding transactions for a long time. Similarly, Shreeram Sugar Mills and Nepal Film Development Company have failed to carry out their stocks trading until now. Nepse Spokesperson Sambhu Pant said these companies repeatedly ignored Nepse’s directive. “Although we notified them to clear their annual fees by mid-October, the companies did not pay heed,” said Pant, adding the action is one of Nepse’s official procedures to compel such companies to clear their annual fees. Companies with a paid-up capital of Rs 10 million have to pay an annual fee of Rs 15,000, while those with Rs 50 million capital have to pay Rs 25,000 annually. For companies with paid-up capital of Rs 50-100 million, the charge has been fixed at Rs 35,000 and those with more than Rs 100 million capital have to pay Rs 50,000 in service charge every year. According to Nepse, these companies will be allowed to carry out their stock transaction only after clearing their dues.

Citizens to issue dividend

Citizens Bank International is providing a 15 percent cash dividend to its shareholders. The decision was approved by Nepal Rastra Bank and the bank’s seventh annual general meeting. The bank, which has been serving its over 160,000 customers throughout the country from 34 branch offices, 36 branchless banking service points and 36 ATM terminals, has collected deposits of Rs 22.74 billion and issued loans amounting to Rs 17.95 billion in the fiscal year 2012-13. During the same period, the bank posted an operational profit of Rs 565.6 million and a net profit of Rs 413.2 million.

Mega shares listed on Nepse

Shares of Mega Bank Nepal have been listed on the Nepal Stock Exchange (Nepse). The agreement to list its shares worth Rs 2.33 billion at Rs 100 per share cost price and paid-up price was signed by Anil Keshary Shah, chief executive officer of Mega Bank and general manager of Nepse Sitaram Thapaliya. Out of the total shares of 23.3 million, the general public and employees were apportioned a total of 6.99 million shares while the remaining 16.31 million shares were allocated to the promoter shareholders of the bank. The bank had made its initial public offering through Nabil Invest, Citizen Investment Trust, NIBL Capital Markets and NMB Capital by floating 6.99 million shares worth Rs 699 million which was oversubscribed 22-fold. These shares have been allocated to a total of 145,675 shareholders.

SBI to issue bonus shares

A board meeting of Nepal SBI Bank has proposed issuing 12.5 bonus shares per 100 shares and 7.5 percent cash dividend. The proposal is subject to approval of Nepal Rastra Bank and the bank’s upcoming 20th AGM. Likewise, the bank’s board meeting on Sunday also approved the financial statement of the fiscal year 2012-13 in which the bank posted a net profit of Rs 771.47 million.

Nepse logs 3.33 points gain in a week

NEPAL Stock Exchange (Nepse) gained 3.33 points last week to close at 551.44 points. It was the first time that the benchmark has crossed 550 points in the last six months. The upward movement of the stock market has gained momentum in the recent days with the companies listed on the Nepse showing good profit margin. Ram Chandra Bhattarai, director at Aryatara Investment _ Securities, attributed the recent gain to people’s hope that they would get good profit given that a majority of the companies are publishing their financial results of the last fiscal year. “The market is expected to go up until the companies announce book closure.” Of the nine groups categorised, six registered gains in their respective indices. hydropower companies topped the list with a gain of 98.22 points, followed by hotels, manufacturing, development Banks, ‘others’ and finance companies. Bhattrai said the expectation of investors that Chilime Hydropower would provide a heavy bonus share and cash dividend helped soar the hydropower sector’s index. Only two trading groups— Insurance Companies and Commercial Banks—witnessed a fall in their respective indices last week. The index of ‘trading’ group remained stable at 172.23 throughout the weekdays. The sensitive index that measures the transaction of the class ‘A’ companies increased by 0.59 points to close at 138.55 points. Among the individual companies, Nepal Bangladesh Bank topped both in terms of the number of shares and transaction amount. The bank witnessed a turnover of Rs 174.04 million through transaction of 489,899 shares over the period. According to stockbrokers, the bank’s higher equity transaction was fueled by the news that the ICFC, a Bengali group is on the verge of taking over the shares of NB Group in the bank. Chilime Hydropower Company, Nepal Credit _ Commerce Bank, Everest Bank and Kumari Bank are other companies that hit the list of top transaction amount. The capital market observed a 37.44 percent rise in the transaction worth during the review period. The total turnover of the market amounted to Rs 872.1 million, up from Rs 634.5 million in the previous week. However, the number of shares traded declined to 2,621,917 units as against 2,709,302 units. Transaction of ‘A’ category companies amounted to Rs 392.3 million, which was 44.99 percent of the total transaction amount. up after US growth data

Two foreign bourses propose working terms with Nepse

TWO foreign stock exchange companies — Korea Exchange and Singapore Exchange — have expressed interest in working as a strategic partner with the Nepal Stock Exchange (Nepse). Nepse said it is studying the proposal forwarded by these companies. Korea Exchange’s proposal seeks a 10 percent stake in Nepse. Nepse General Manager Sitaram Thapaliya said they are studying Korea Exchange’s system to know whether it will be compatible in Nepal’s case. Thapaliya, however, declined to provide details on Singapore Exchange, saying they have not yet received a detailed proposal from the company. “If found feasible in the preliminary study, we will hire a consultant and fix the ‘Terms of Reference’ for the selection,” he said, adding they plan to complete the preliminary study and issue a public notice to appoint a consultant by mid September. If a company is selected for strategic partnership, Nepse will receive the system and other technical support, while the company will take a stake in Nepse. Nepse has long been searching for a strategic partner as it has failed in terms of innovation and online trading. The existing system is not compatible even for new instruments like mutual funds, market makers, debt instruments and stock derivatives, among others. Following the government’s decision to divest its shares in Nepse, the latter has been pursuing privatisation for the last four and half years. The Ministry of Finance and the Nepal Rastra Bank have also asked Nepse to find a strategic partner so that the government could divest or transfer its shares. The government holds 58.66 percent in Nepse, while the central bank holds 34.60 percent. After appointing a strategic partner, Nepse plans to adopt a full automation system for stock trading. “Besides, it could also help introduce new products and promote bond trading, which is currently in poor state,” said Thapaliya. India’s software major Infosys recently forwarded a proposal for its stock exchange software. Thapaliya said they are holding consultations with government authorities concerned on whether to initiate talks with prospective strategic partners or purchase the system. “We are waiting a clear government policy.”

Stock market up 7.86 points; hotels lead

NEPAL Stock Exchange (Nepse) last week rose 7.86 points to close at 548.40 points on Thursday. With the listed companies, particularly commercial banks, announcing huge profits in the last fiscal year, the stock market has witnessed increased investor interest lately. The market, which opened at 540.54 points on Sunday, maintained its upward momentum throughout the week. Stock analyst Rabindra Bhattarai said as usual, investors are expecting benefits after annual general meetings of listed companies at the beginning of the new fiscal year. “As a result, the index moved up with increase in investment,” he said. Six out of the nine groups posted growth. Hotels (up 24.88 points) led the gainers side. Others, Commercial Banks, Development Banks, Hydropower Companies and Finance Companies followed. While the trading group’s index remained stable at 172.23 points, Insurance Companies and Manufacturing registered posted losses. Bhattarai expressed hope that the market would maintain its upward trend in the coming days. He said growing number of institutional investors, such as mutual funds, has helped boost the secondary market. “However, the sustainability of the growth also depends on political changes that could take place in the future,” he said. The sensitive index that measures transaction of A category companies grew by 2.54 points to close at 138.11 points. Global IME Bank topped in terms of both the number of shares traded and transaction volume. The bank recorded transaction worth Rs 90.75 million from the trading of 709,006 shares. National Life Insurance Company, Chilime Hydropower Company, Lumbini Bank and Asian Insurance Company were among the top five companies in terms of transaction amont. The capital market, however, saw a 12.50 percent drop in the overall transaction. The market last week realized a turnover of Rs 634.5 million from the trading of 2,709,302 shares. In the previous week, the transaction amount was at Rs 676ð1 million from the trading of 2,071,930 shares. “A” category companies witnessed a turnover of Rs 271.4 million — 42.78 percent of the total transaction.

Nepse down 3 points amid selling pressure

NEPAL Stock Exchange (Nepse) slipped 3 points last week to close at 536.45 points on Thursday. The market had opened at 539.44 points on Sunday. Ram Krishna Tiwari, managing director of Oxford Securities, said overflow of shares due to bank promoters selling their promoter’s shares might have affected the market. He said a huge trading of preference shares of a few banks also played a crucial role in bringing down the market. Tiwari, however, expressed hope the benchmark index would cross the 550-point mark in the next few weeks. Of the nine groups, only three saw rise in their indices. With a gain of 45.43 points, insurance companies led the gainers’ side. Groups representing manufacturing companies and development banks were the other gainers. The hotels group was last week’s biggest loser — down 21.21 points. Hydropower companies, commercial banks, others’ and finance companies also shed points. The sub-index of trading group was stable at 172.23 points. The sensitive index that measures transaction of A class companies dropped 0.84 points to close at 134.60 points. Global IME Bank topped in terms of both number of shares traded (647,870 units) and the transaction worth (Rs 82.92 million). Companies on the top-five list in terms of transaction worth were National Life Insurance Company, Everest Bank, Chilime Hydropower Company and National Life Insurance. Despite the fall in the benchmark index, the overall market transaction, however, rose 7.27 percent to Rs 676.1 million from the trading 2,071,930 shares. Transaction of A category companies amounted to Rs 353 million — 48.67 percent of the total market transaction. Last week, the exchange listed bonus shares of seven companies including Sahayogi Bikas Bank, Gurans Life Insurance Company, Pashchimanchal Finance, Nirdhan Utthan Bank, Ohm Finance, Lumbini General Insurance Company and Swabalamban Microfinance Development Bank.

Stock market ends week 3.92 points lower

NEPAL Stock Exchange (Nepse) last week slipped 3.92 points to close at 542.69 points on Thursday. The market had opened at 546.61 points on Sunday. The week’s largest single-day fall came on Monday when the market fell 5.68 points, but recovered some losses later in the week. Navaraj Pokharel of Opal Securities termed the fall in the benchmark index “market correction”. “As Nepse witnessed an upward trend in previous weeks, a slight downturn is normal,” he said. Pokharel said Monday’s fall was due to small investors’ concerns that the sale of 19 percent bank promoters’ shares could affect the market adversely. “These investors show quick response to even a small possible change in the secondary market,” he said. Of the nine trading groups, Hotels, Insurance Companies and Development Banks posted gains. Hotels registered the highest gain of 16.14 points. The group representing Hydropower Companies led the losers’ side with a downfall of 22.57 points. Other groups posting loses were Commercial Banks, Others, and Finance Companies. The sub-indices of Manufacturing and Trading groups were stable at 879.30 and 172.23 points, respectively. The sensitive index that measures the transaction of ‘A’ category companies declined marginally by 0.69 points and closed at 136.36 points. Pokharel said the market could move upwards in the following weeks as most of the banks and financial institutions have so far published healthy financial statements. Last week, NIC Asia Bank posted the highest individual transaction of Rs 45.82 million. Everest Bank, Chilime Hydropower Company, Global IME Bank and Nepal Life Insurance Company were among the top five companies in terms of transaction worth. Nabil Balance Fund, with the trading of 226,096 shares, topped in terms of the number of shares traded on the exchange. The overall market transaction dropped 22.45 percent to Rs 676.1 million from the previous week’s Rs 871.8 million. The number of shares traded was also declined to 2,071,930 units from 2,981,847 units. ‘A’ category companies witnessed a turnover of Rs 345.7 million — 51.14 percent of the total market turnover.

Nepse up 12.59 points; hydropower cos lead

NEPAL Stock Exchange (Nepse) last week posted a double- digit growth of 12.59 points to close at 546.89 points on Thursday. The market had opened at 534.30 points on Sunday. Anjan Raj Poudel, proprietor of Thrive Brokerage House, said improved liquidity situation in banks and positive financial statements of listed companies helped boost the capital market. “The monetary policy, which talks about improving liquidity situation in the banking system, has also helped the market grow,” he said. Of the nine sub-groups, six posted gains during the review period. The group representing hydropower companies was the biggest gainer — up 61.79 points. Poudel attributed the growth in the hydropower sub-index to general understanding that the sector would be the best alternative for investment. ‘Others’, Insurance Companies, Commercial Banks, Finance Companies and Development Banks were other gainers. With a downfall of 6.01 points, the Hotel sector was the only loser. Manufacturing and trading groups were stable at 875.68 points and 172.23 points, respectively. The sensitive index that measures the transaction of ‘A’ category companies increased 3.31 points to close at 137.17 points. Everest Bank posted the highest transaction of Rs 87.49 million. Chilime Hydropower Company, Himalayan Distillery, Nepal Credit _ Commerce Bank and NIC Asia Bank were among the top five companies in terms of transaction amount. Nabil Balance Fund topped the chart in terms of the number of shares traded (609,080 units). Last week, the overall market turnover saw a 20.30 percent rise to reach Rs 871.8 million. A total of 2,981,847 shares were traded last week. Transaction of ‘A’ category companies amounted to Rs 438.8 million — 50.34 percent of the total market transaction. Over the review period, seven companies listed their bonus shares on the exchange. These include Siddhartha Bank, Nepal Life Insurance Company, Prudential Insurance Company, Nepal Insurance Company, Shikhar Insurance, Swabalamban Micro-finance Development Bank and Nepal Credit _ Commerce Bank.

Nepse at three-and-half months high

Nepal Stock Exchange (Nepse) ended in green for fourth straight day on Wednesday, gaining 1.64 points to close at a three-and-half months high of 547.61 points. The benchmark index had logged 548.4 points on March 14 before it took downward slide. Share analysts say Nepse index has been growing gradually due to hope among investors that listed companies will report better performance in fourth quarter of the previous fiscal year after couple of months. “As some companies reported better financial performance in the fourth quarter, investors are optimistic about better finance performance of other companies as well. This is helping Nepse index post gains,” Nanda Kishore Mundada, former president of Stock Brokers Association Nepal, told Republica. Mundada, however, said Nepse´s bull run will not continue for longer period. On Wednesday, all trading groups, except the Others Group, saw their sub-indices go up. The dominant Banking group saw its sub-index increase by 2.58 points to close at 542.14 points. Similarly, the sub-indices of Development Bank and Hydropower groups also went up by 1.19 points and 7.46 points, respectively to settle at 264.4 points and 1,250.78 points. Likewise, Finance and Insurance group also ended in green, gaining 2 points and 2.36 points to close at 266.56 points and 1,133.83 points, respectively. Others group, however, lost 3.52 points to close at 659.11 points. Total turnover was recorded at Rs 201.64 million on Wednesday, with 547,683 units of shares being traded through 2,123 transactions. Market capitalization -- total worth of shares listed in the secondary share market -- reached Rs 544.43 billion. Bank of Kathmandu, Asian Life Insurance Company Ltd, Arun Valley Hydropower Development Company Ltd, Agriculture Development Bank Ltd and Ace Development Bank Ltd were the top five companies in terms of transaction volume recorded on Wednesday.

Stock market ends week 6.65 points down

NEPAL Stock Exchange (Nepse) slipped 6.65 points last week to settle at 529.15 points on Thursday. The market, which opened at 535.80 points on Sunday, dropped 2.84 points on the Monday before gaining a marginal 0.09 on Tuesday. On Wednesday, the benchmark index shed 3.31 points followed by a 0.59-point loss on Thursday. Ram Chandra Bhattarai, director at Aryatara Investment _ Securities, termed the downfall “a normal scenario”. “The hope that the central bank would ask banks and financial institutions (BFIs) to hike their paid-up capital had contributed to the rise in the index the previous week,” he said. “But as the central bank did not do so, investors were hesitant to invest.” The monetary policy has adopted a strategy of raising BFIs’ paid-up capital requirement, but has not fixed the size of the increment. Currently, commercial banks have to maintain a minimum paid-up capital of Rs 2 billion, national-level development bank Rs 640 million, and national-level finance companies Rs 200 million. Of the nine sub-groups on the exchange, only four saw their indices rise during the review period. With a gain of 47.92 points, the group representing insurance companies was last week’s highest gainer. Other gainers were finance companies, trading and hydropower companies. Bhattarai said investors lately are getting attracted towards the stocks of lifeinsurance companies considering the sector safer. “Besides, investors are also finding the sector as the best alternative to expand their portfolio,” he said. The Others group was last week’s biggest loser — down 17.62 points. Hotels and commercial banks followed. The sensitive index that measures transactions of ‘A’ category companies declined by 2.29 points to close at 132.76 points. Among individual companies, Everest Bank posted the highest transaction of Rs 92.74 million. NIC Asia Bank, Chilime Hydropower Company, Nepal Investment Bank and Nepal Credit _ Commerce Bank were the top five companies by transaction worth. Nabil Balance Fund continued to top the chart in terms of the number of shares traded (505,893 units). The overall market transaction rose 84.13 percent to Rs 724.6 million from the trading of 2,531,949 shares. Transaction of ‘A’ category companies amounted to Rs 378.7 million — 52.27 percent of the total market transaction.

New GM at Nepse stresses online share trading

The newly appointed executive head of Nepal Stock Exchange (Nepse) has emphasised on making stock exchange trading online in the near future. “Making internet based share trading possible for investors is one of my top priorities,” said general manager Sitaram Thapaliya who assumed his duties today. Thapaliya was appointed as general manager of Nepse by the Cabinet meeting held on June 27. Nepse had been without a GM since January 2013, after then GM Shankar Man Singh’s tenure got over. At present, Nepse’s trading system is semi-automated that takes electronic orders from brokers’ portals and matches them, and then executes orders. In order to buy or sell stocks, investors need to approach the brokers to place the orders. In absence of home-based order placement system, the Nepali stock market has remained elusive to Non Resident Nepalis. They require a trading system that allows them to place buy and sell orders in trading system directly through the portal of their brokers on the system. “Getting CDS and Clearing Ltd (CDSC) to become fully operational is also important,” pointed out Thapaliya. CDSC that is almost ready to become operational is unable to do so in the absence of clearing members and a small number of companies with dematerialised shares. With CDSC coming into operation, clearing and settlement of shares traded will take place instantly. Moreover, Nepse is in dire need of upgrading the existing trading system as it has been facing problems at times. A trading system that can process about 1000 orders within a minute is required, and it should also support the trading of new instruments later on. Likewise, trading needs to be compatible with the central depository system. “We have yet to decide whether upgradation will be sufficient or the system needs to be completely replaced,” said Thapaliya. Nepse, that had started operations in 1994, used an open-out-cry system for trading until August 2007. In 2007, it moved to screen-based trading by setting up a Wide Area Network that enabled brokers to be connected with Nepse’s server from their offices.

IPOs witness three-fold rise this fiscal

Primary share investors had a lot to choose from as the number of primary issues offered this year was three times more than the initial offerings in last fiscal year. The capital market will see Initial Public Offerings (IPOs) of 18 financial institutions, one insurance firm and one hydropower firm before the fiscal year ends. The IPOs will offer about 300 million unit shares worth Rs 3.8 billion. The year started with Khandbari Bikas Bank’s public issue worth Rs 15 million and will now end with Rural Microfinance Development Centre (RMDC)’s IPO that will be issuing 1.56 million shares with premium price of Rs 180. Securities Board of Nepal (Sebon) has given a green signal to the public issue of 21 companies, debenture issues of seven commercial banks, and two mutual fund issues. Moreover, this year’s IPO market was flooded with three large offerings of commercial banks worth Rs 2.09 billion that were overwhelmingly subscribed. Mega Bank Nepal that offered shares worth Rs 699 million saw its IPO oversubscribed by 22 times. Likewise, offerings of Civil Bank and Commerz and Trust Bank were also oversubscribed by seven and 12 times, respectively. Though investors were eager about large offerings, a few financial institutions were not very fortunate. Bright Development Bank and Jebils Finance had to extend the offering period to get fully subscribed. “Investors are wary of purchasing shares of smaller and regional development banks and finance companies as investors are not assured that they will fare well in the long run,” said acting president of Nepal Investors’ Forum Raj Kumar Timilsina. Last year, Bhargab Bikas Bank’s promoters and underwriters had to pitch in due to lukewarm participation of investors. Likewise, the underwriter of Lotus Investment Finance — Civil Capital — refused to buy shares that were unsubscribed. Sebon might allow the underwriter to get away with not fulfilling its obligations and annul the IPO. “Investors do not want to buy shares of financial institutions that are rushing into an IPO just to fulfil their regulatory capital requirement, so they are also planning carefully,” added Timilsina. IPOs hold a special place in any investor’s portfolio as it provides investors to purchase shares at face value which can be easily traded at double the amount following the listing at the stock exchange. For rookie investors, IPOs are supposed to be the best investment before getting into secondary share trading. The emergence of a credit rating agency has also helped investors decide on whether or not to subscribe a certain company’s IPO. ICRA Nepal has already rated the offerings of RMDC and Sana Kisan Bikas Bank that will be open before end of current fiscal.  

Nepse makes marginal gains over the week

NEPAL Stock Exchange (Nepse) index witnessed marginal increment of 0.48 points, closing at 493.67 last week. The secondary market opened at 493.18 points. The benchmark index made nominal gains for the first two trading days and dropped on Tuesday before rising again on the last two days. Anjan Raj Poudel, proprietor of Thrive Brokerage House, termed the Nepse index’s marginal fluctuation as the stability in the secondary market. “The investors have also not complained about constant follow up from the banks and financial institutions for recovery of loans this fiscal,” he said. Of the nine trading groups, hotels, hydropower and insurance companies and development banks were among the gainers over the last week. Hotels group witnessed the largest gain of 19.38 points whereas indices of finance companies, commercial banks and manufacturing companies suffered a dip. Finance companies witnessed the biggest fall of 1.09 points. The indices of ‘Others’ and Trade groups remained stable at 622.70 and 177.05 points respectively throughout the weekdays. Poudel, however, hopes the capital market will bounce back with the commencement of the new fiscal year. The sensitive index that measures the transaction of the ‘A’ category companies also recorded marginal growth by 0.11 points to close at 123.40 points. Of the individual companies, Chilime Hydropower Company topped the index in terms of transaction amount, totalling Rs 49.36 million. Everest Bank, Commerz and Trust Bank Nepal, Nepal Investment Bank and Nepal SBI Bank also made it onto the top five list in terms of transaction worth. Similarly, in terms of the number of shares, Nabil Balance Fund topped the list with a transaction of 419,376 units. The capital market witnessed a 11.6 percent downfall in the transaction amount last week. The turnover amount was recorded at Rs 378.8 million from transaction of 1,753,534 shares. A total of 262,977 shares worth Rs 428.5 million were traded during the period. ‘A’ category companies witnessed turnover of Rs 230.8 million, which accounted 60.94 percent of the total transaction. Meanwhile, Nepse registered bonus shares of National Life Insurance companies and Nava Durga Finance during the period.

Nepse moderately down

The domestic stock market index fell moderately over the week due to fall in prices of bank stocks. The Nepal Stock Exchange (Nepse) index slipped 1.91 points, or 0.38 percent, over the week to close at 493.63 points on Thursday, the last trading day of the week, as stocks of leading commercial banks like Nabil, Standard Chartered, Nepal Investment and Himalayan took a dip. The slide taken by the benchmark index has been identified as a “minor hiccup” by stockbrokers as they were expecting bigger falls toward the end of the fiscal year when investors, who have purchased shares using bank credit, go on a selling spree to pay quarterly loan installments. “Investors are currently upbeat as they are expecting the annual budget to come on time. They are also hoping that the listed companies would deliver good full-year results,” Stockbroker Nanda Kishore Mundada said. “Besides, hints given by the central bank to further promote merger of banking institutions have also lifted spirits of investors as this would make listed financial institutions stronger.” Despite this optimism, the share market did feel some selling pressure over the week which dragged down stock prices of some of the leading banks and caused the banking index to slip to 486.22 points by Thursday from Sunday´s opening of 490.47. Nepse´s weekly report shows shares of Nabil Bank closing at Rs 1,741 on Thursday, down Rs 32 from Sunday´s Rs 1,773. Stocks of Standard Chartered Bank Nepal also lost Rs 15 over the week to end the week at Rs 1,795, while shares of Nepal Investment Bank shed Rs 7 over the week to close at Rs 733. Likewise, stocks of Himalayan Bank also closed Rs 2 lower at Rs 668 on Thursday. Among others, share prices of finance companies also fell moderately, which caused finance company index to close at 252.91 points Thursday, down from 254.39 points recorded on Sunday.

RMDC to launch IPO at premium rate

Rural Microfinance Development Centre (RMDC) — a wholesale micro credit lender — will launch the initial public offering (IPO) of its premium added shares from July 11. RMDC has offered 1.56 million units of primary shares for Rs 180 per unit — at face value of Rs 100 with added premium of Rs 80. The general public can subscribe for 1.45 million unit shares at the premium rate as RMDC has set aside 31,200 units for its employees and 78,000 units for mutual funds. The IPO, managed by Ace Capital, will be open from July 11 to July 15. But in case of under subscription the issue will be open till July 25. RMDC is the third company — after Chilime Hydro and Nepal Telecom — and the first financial institution to issue primary shares at a premium price. RMDC has been allowed by Securities Board of Nepal and Nepal Rastra Bank (NRB) to issue the shares at a premium rate. ICRA Nepal — the credit rating agency — has assigned an ‘ICRANP IPO Grade 3+’ rating to RMDC’s public offering. The symbol indicates that the fundamental of the issuer — RMDC — is average. According to ICRA Nepal’s grading system, IPO Grade 1 indicates strong fundamentals and Grade 5 indicates poor fundamentals. RMDC has already sold 300,000 units of shares worth Rs 30 million face value at Rs 180 per unit to International Finance Corporation (IFC) — a private sector lending window of the World Bank Group. Likewise, Siddhartha Bank has also bought 140,000 unit shares at a premium at various rates of up to Rs 315 per unit. RMDC is promoted by NRB, 13 class ‘A’ commercial banks, five class ‘D’ microfinance institutions, and Deposit and Credit Guarantee Corporation. It provides micro finance to beneficiaries through wholesale lending through other microfinance development banks, cooperatives and financial NGOs. By the end of the third quarter, RMDC’s paid up capital was at Rs 364 million following share purchases by Siddhartha Bank and IFC. After the public issue, RMDC will have a paid capital of Rs 520 million. There are seven microfinance development banks listed at Nepal Stock Exchange. These microfinance stocks are well traded in the stock market and are in high demand due to their handsome dividend payouts.  

Stock market up 7.97 points, banks gain

THE Nepal Stock Exchange (Nepse) last week gained 7.97 points, which analysts said was due to reports that central bank would hike the minimum paid-up capital requirement for banks and financial institutions (BFIs). The market which opened at 487.63 on Sunday closed at 495.60 points on Thursday. The benchmark index posted gains in the first four trading days before falling marginally on the final trading day of the week. On Tuesday, the Nepse index surged by 4.96 points — its largest single- day gain in a month. Nepal Stock Brokers’ Association’s President Narendra Raj Sijapati said reports about the possible hike in the paid-up capital requirement for BFIs played a crucial role in increasing prices of BFIs’ shares, which pushed up the entire market. “Investors could have been enticed by the ho

pe of benefiting from the possible issuance of rights and bonus shares by BFIs to increase their capital,” he said. Commercial banks’ group saw a double-digit rise in its subindex, while the Others group was last week’s biggest gainer (up 14.10 points). Finance Companies’ sub-index also posted gains. Last week’s losers were Insurance Companies, Hotels, Development Banks and Hydropower Companies. Indices of manufacturing and trading groups were stable at 878.17 and 177.05 points, respectively. The sensitive index that measures transactions of ‘A’ category companies was up 2.36 points to close at 123.96 points. Everest bank posted the highest individual transaction of Rs 47.43 million. Chilime Hydropower Company, Bank of Kathmandu, Kumari Bank and International Leasing and Finance were among the top five companies in terms of transaction worth. Nabil Balance Fund, with trading of 857,892 shares, topped in terms of the number of shares traded. The overall market transaction grew by 9.11 percent to Rs 428.5 million from the transaction of 262,977 shares. Previous week, the market turnover was at Rs 392.7 million from the transaction of 1,587,650 shares. ‘A’ category companies witnessed a turnover of Rs 232.5 million — 54.27 percent of the total transaction. The surge in the benchmark index has been attributed to reports that central bank would hike the minimum paid-up capital requirement for BFIs

Nepse ends week 6.43 points down

NEPAL Stock Exchange (Nepse) slipped 6.43 points last week to settle at 488.55 points on Thursday. The market had opened at 494.98 points on Sunday. The fall in the Nepse index has been attributed to banks and financial institutions’ (BFIs) reluctance to provide margin loans towards the end of the fiscal year. “With the fiscal year approaching end, BFIs are more focusing on loan recovery,” said Narendra Raj Sijapati, president of Nepal Stockbrokers’ Association. Sijapati said the slump in the benchmark index is also due to investors’ diversion to initial public offerings issued recently by various companies, including Mega Bank. “Besides, the issuance of Nepal Bank’s rights shares also affected the capital market to some extent,” he said. Nepal Bank, however, has limited shareholders. A majority of the groups on the exchange posted losses. Commercial Banks, with a downfall of 8.92 points, was last week’s biggest loser. It was followed by ‘Others’, Insurance Companies, Hotels, Development Banks and Finance Companies. Only two groups— hydropower companies and manufacturing—registered gains. Trading group’s index remained constant at 173.77 points. Sijapati expressed hope that the market would improve with the beginning of the new fiscal year. The sensitive index that measures transactions of ‘A’ category companies fell by 2.09 points to close at 121.70 points. Everest Bank posted the highest transaction amount (Rs 103.02 million). Bank of Kathmandu, Standard Chartered Bank Nepal, Chilime Hydropower Company and Nepal Investment Bank were among the top five companies in terms of transaction amount. Nabil Balance Fund topped in terms of the highest number of shares traded—379,201 units. The market turnover posted a 33.38 percent growth last week to reach Rs 392.7 million from the transaction of 1,587,650 units of shares. Last week’s figure was Rs 294.4 million. ‘A’ category companies witnessed a turnover of Rs 253.04 million—64.42 percent of the total transaction. The capital market listed 561,600 bonus shares of Prime Life Insurance. The fall in the Nepse index has been attributed to banks and financial institutions' reluctance to provide margin loans towards the end of the fiscal year