During the review period of 18th February to 15th March 2017, the Nepal Stock Exchange (NEPSE) index rose by 12.28 points (+0.91%) to close at 1356.13 points. The market is in a recovery mode since the index plunged to the lowest point below 1300 points i.e. 1299.29 on 28th February. Investors’ confidence seems to be gaining momentum amidst positive political development and ease in banking liquidity. Moreover, the opportunities to invest in attractive prices have also attracted investors.
During the review period, except for the Commercial banks and Others sub-index, all the sub-indices ended in green zone. The Insurance sub-index (+6.34%) was the biggest gainer with the increase in share value of Rastriya Beema Company (+NPR 150), Prabhu Insurance (+NPR 145), Asian Life Insurance Company (+NPR 121) and Sagarmatha Insurance Company (+NPR 118). Following the suit, the Hydropower sub-index (+6.31%) increased as share value of Api Power Company (+NPR 73) and Sanima Mai Hydrpower (+ NPR 69) went up. Likewise, Development Bank sub-index (+2.47%) rose as the share value of Nepal Grameen Bikas Bank (+NPR 145), Womi Microfinance Bittiya Sanstha (+NPR 137) and Mithila LaghuBitta Bikas Bank (+ NPR 128) increased. Likewise, the Hotel sub-index (+2.05%) went up as share value of Soaltee Hotel (+NPR 17) and Taragaon Regency Hotel (+NPR 8) increased. Also, the Manufacturing and Processing sub-index (+ 1.73%) went up as share value of Unilever Nepal (+NPR 1,200) increased. Similarly, the Finance sub-index (+0.16%) gained marginally as share value of Pokhara Finance (+NPR 4) and Janaki Finance (+NPR 2) went up.
Nonetheless, amongst the losers, the Others sub-index (-6.81%) shed value as share value of Nepal Doorsanchar Company (-NPR 35) tumbled while the Commercial Bank sub-index (-0.58%) declined as share values of Citizen Bank International (-NPR 66), Sunrise Bank (-NPR 27) and NMB Bank (- NPR 18) went down.
News and Highlights
With the aim of allowing stock investors to trade over the internet, the Securities Board of Nepal (SEBON) has instructed stock brokers to implement a semi-online trading system until a fully automated online trading system is in place. With the proposed system, the traders can place their orders via the internet without having to visit or call a stock broker’s office. The broker will have to provide a username and password to their client through which the clients can login to place their orders online.
On a positive development, NEPSE has directed stock brokers who have already established provisions to establish a Remote Work Station (RWS) to bring the same into operation. Similarly, stock brokers who are yet to comply with the terms of RWS will have to comply by mid-Baishakh 2074.
CDS and Clearing Limited has appointed three new clearing banks namely Nepal Investment Bank, Siddhartha Bank and Prabhu Bank based on NEPSE standards. Previously, Global IME was the only clearing bank. With this addition, clearance and settlement of payments related to securities transactions is expected be much easier.
In the public issue front, market witnessed both Initial Public Offering (IPO) and Further Public Offering (FPO) during the review period. United Modi Hydropower Ltd. issued IPO worth NPR 172.5 million, after allotment of this IPO the company’s paid up capital will reach NPR 1.15 billion from the current NPR 977.5 million. The IPO was oversubscribed by more than 24.9 times.
Similarly, Standard Chartered Bank Nepal Ltd. issued FPO of 2.5 million unit shares worth NPR 3.30 billion at NPR 1,290 per share. The FPO was oversubscribed by 11.6 times collecting NPR 38.2 billion. After the allotment of FPO, its paid up capital will reach to NPR 4 billion and its reserve will grow by NPR 3.04 billion. The FPO was assigned Grade 2+ by ICRA Nepal indicating above-average fundamentals.
Lately, the market has seen some improvement as investors’ confidence has risen due to anticipation of local elections and improved liquidity in the banking system. Moreover, lower stock prices have further aggregated demand. Further, SEBON’s initiative to automate online order placement and addition of new Remote Work Station (RWS) has provided additional encouragement. The market is likely is continue with current trend with some retracements.
This is an analysis from beed invest ltd. No expressed or implied warrant is made for usefulness or completeness of this information and no liability will be accepted for consequences of actions taken on the basis of this analysis.