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Thu, April 25, 2024

Beed’s take on the market

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During the review period of September 2 to 24, the Nepal Stock Exchange (NEPSE) index rose by 49.57 points (+2.53%) to close at 2,010.35 points. The secondary market was able to recover slightly from its downward momentum, reaching its highest point of 2,029.78 points on September 21. Dividend announcements by listed companies, decreasing long-term interest rates, and the anticipation of favourable revisions in the margin lending policy by the central bank were some of the primary drivers that somewhat improved investor morale. However, despite the improvement in the index, the total market volume during the review period declined by 50.01% to reach Rs 19.151 billion compared to the previous review period.

During the review period, contrary to the previous review period, all 10 of the sub-indices landed in the green zone.

The Hydropower sub-index (+7.38%) was the biggest gainer as the share value of Shuvan Power (+Rs 303.9), Three Star Hydropower (+Rs 262), and Menchhiyam Hydropower (+Rs 78) increased substantially. The Finance sub-index (5.80%) witnessed rise in the share prices of Gurkhas Finance (+Rs 26), Progressive Finance (+Rs 25.6) and Guheshowori Merchant Bank and Finance (+Rs 25). 

Development Bank sub-index (+4.87%) followed suit with increase in the share prices of Green Development Bank (+Rs 32), Lumbini Bikas Bank (+Rs 15.3), and Kamana Sewa Bikas Bank (+Rs 15.2). Microfinance sub-index (+4.10%) also went up as the share value of Himalayan Microfinance (+Rs 90), Swarojgar Microfinance (+Rs 87.9) and Mahila Microfinance (+Rs 70.8) inclined.

Manufacturing and Processing sub-index (+3.26%) increased with the share price of Unilever Nepal (+Rs 510), Himalayan Distillery (+Rs 54) and Shivam Cement (+Rs 36) going up. Non-Life Insurance sub-index (+1.95%) also surged with rise in the share value of Prabhu Insurance (+Rs 28.1), Nepal Insurance (+Rs 24.9) and IGI Prudential Insurance (+Rs 16). 

Others sub-index (+1.85%) witnessed a rise in the share prices of Nepal Republic Media (+Rs 10), Nepal Telecom (+Rs 5.5), and Nepal Reinsurance (+Rs 1.2). Life Insurance sub-index (+1.03%) had an upswing with rise in the share value of Suryajyoti Life Insurance (+Rs 11), Himalayan Life Insurance (+Rs 2) and Nepal Life Insurance (+Rs 2). Further, Reliable Nepal Life Insurance and Sun Nepal Life Insurance started their trading in the review period closing at Rs 463.1 and Rs 455.9, respectively.

The Commercial Bank sub-index (+0.89%) followed suit with an expansion in the share value of NIC Asia (+Rs 8.9), Laxmi Sunrise (+Rs 8), and Nabil (+Rs 4.7). The Hotels and Tourism sub-index (+0.69%) saw no movement in the share prices of Soaltee Hotel, and a decrease in share prices of Oriental Hotels (-Rs 30.5) and City Hotel (-Rs 96).

News and Highlights

On the public issues front, SEBON did not approve any new Initial Public Offerings (IPOs) during the review period. SEBON, however, has put the IPO of two hydropower companies and one reinsurance company under preliminary review. The hydropower companies are Bhujung Hydropower (Rs 145.5 million) and Sanvi Energy (Rs 379 million). Their respective issue managers are Kumari Capital and Nepal SBI Merchant Banking. The reinsurance company, Himalayan Reinsurance worth Rs 6.24 billion, has been appointed NMB Capital as the issue manager. 

Outlook

As the end of the first quarter of the current fiscal year and the holiday season approaching, investors are hopeful of increased economic activities having a positive reflection on the market post-festivities. However, the long-term interest rates for the month of Asoj did not decrease as anticipated with commercial banks continuing to increase their rates to protect deposits. This has dented investor morale. The future direction of the market is likely to depend on the anticipated revision of monetary policy measures in accordance with the new agreement between the central bank and the Ministry of Finance. 

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.

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MARCH 2024

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