During the review period of October 23 to November 22, the Nepal Stock Exchange (NEPSE) index plunged by 63.30 points (-5.09%) and closed at 1,181.24 points. The market was mostly on a declining spree and dropped below the psychological barrier of 1,200 points. Along with fall in NEPSE index, the market also witnessed a significant reduction of 47% in the trading volume mainly attributed to the tight liquidity in the banking system. The total market turnover during the period stood at Rs 4.35 billion.
During the review period, all sub-indices landed in the red zone except for the Manufacturing and Processing sub-index (+5.99%). The Hydropower sub-index (-10.15%) led the pack of losers with decrease in share value of Api Power (-Rs 83), Chilime Hydropower (-Rs 66) and Himalayan Power (-Rs 52). Similarly, Commercial Bank sub-index (-6.37%) was second in line with slump in share value of Standard Chartered Bank (-Rs 111), Everest Bank (-Rs 86) and Nepal SBI Bank (-Rs 47). Likewise, Microfinance sub-index (-5.91%) followed suit with decrease in share value of Kisan Microfinance (-Rs 472), Mirmire Microfinance (-Rs 237) and Nadep Microfinance (-Rs 183). Non-Life Insurance sub-index (-4.37%) went down with decrease in the share value of Everest Insurance (-Rs 471) and United Insurance (-Rs 127). This was followed by Life Insurance sub-index (-4.59%); top loser in this sub-index were Life Insurance Co. Nepal (-Rs 104) and Gurans Life (-Rs 56).
Likewise, Finance sub-index (-2.57%) shed value with decrease in the share value of Pokhara Finance (-Rs 26) and Central Finance (-Rs 14). Similarly, Development Bank sub-index (-2.09%) went down with the fall in share value of Excel Development Bank (-Rs 18) and Bhargav Development Bank (-Rs 17). Furthermore, Others sub-index (-1.51%) followed suit with decrease in share value of Citizen Investment Trust (-Rs 109). Also, Hotels sub-index (-0.85%) went down with decrease in share value of Taragaon Regency (-Rs 13) and Soaltee Hotel (-Rs 9). The only gainer -Manufacturing & Processing (+ 5.99%) – rose with increase in the share value of Unilever Nepal (+Rs 2,727) and Bottlers Nepal (Terai) (+Rs 13).
News & Highlights
The Nepal Stock Exchange (NEPSE) officially launched its full-fledged online stock trading on November 6 that allows investors to place buy and sell orders over the internet. NEPSE Online Trading System (NOTS) is expected to ease management of the growing transaction volume and provide access to a large number of potential investors. Although investors can buy and sell shares from their place, they still need to visit their broker’s office to complete financial settlement as online stock trading will take full shape only after the establishment of an online payment system.
Securities Board of Nepal (SEBON) has endorsed the third amendment of Central Depository Service bylaws 2068 as proposed by CDS and Clearing Ltd with an aim to ease the process of registration and ownership transfer of the listed stocks in the only stock market NEPSE.
In the public issue front, Upper Tamakoshi Hydropower Company (UTHL) and Samudayik Microfinance (SLBSL) issued Initial Public Offering (IPO) worth Rs 1.59 billion and 30 million respectively. UTHL issue was assigned IPO Grade 4 by ICRA Nepal indicating below average fundamentals. Meanwhile, SEBON has approved IPO worth Rs 169.05 million of Joshi Hydropower Development Company for general public. The issue has been assigned IPO Grade 5 by ICRA Nepal indicating poor fundamentals.
Despite attractive declaration of yearly dividend from the earnings of previous Fiscal Year (FY) 2017/18 and start of online trading system, the sole secondary market continued with its downward spiral. Investor confidence remained low as tight liquidity in the banking system continue to impact the market nonetheless, market may witness some fresh buying amidst low Price Equity (PE) ratio of stocks.
This is an analysis from beed management pvt. 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.