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Beed’s take on the market

B360
B360 December 31, 2023, 11:09 am
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During the review period of November 1 to November 26, 2023, the Nepal Stock Exchange (NEPSE) index grew by 49.39 points (+2.66%) to close at 1,907.95 points, the highest point of the review period. The market had fallen at the beginning of the review period, however since then, the market has been trending upwards. The lowering of the bank interest rate by a majority of commercial banks for the month of Mangsir (midNovember to mid-December) has also led to a slight positive shift in market sentiment. The total market volume during the review period decreased by 50% to reach Rs 12.8 billion, as the market remained closed for five working days during the festival of Tihar.

 

During the review period, eight sub-indices ended in the green zone, and two in the red zone. The Life Insurance sub index (+9.78%) was the biggest gainer as the share value of Life Insurance Corporation Nepal (+Rs 76.9), Reliable Nepal Life Insurance (+Rs 67.6) and Sun Nepal Life Insurance (+Rs 65) increased substantially. Tourism sub-index (+9.35%) was second in line as it witnessed a rise in the share prices of Oriental Hotels (+Rs 109.1), Taragaon Regency (+Rs 96), and Kalinchowk Darshan (+Rs 70).

Non-Life Insurance subindex (+5.60%) followed suit with a growth in the share prices of Rastriya Beema Company (+Rs 449), Nepal Insurance (+Rs 73), and Himalayan Everest Insurance (+Rs 63). Hydropower sub-index (+4.74%) also rose as share value of Mandu Hydropower (+Rs 89), Bhagwati Hydropower (+Rs 68.8), and Three Star Hydropower (+Rs 67) went up. Additionally, shares of Mathillo Mailun Khola (Rs 254.9) also started trading in the secondary market in the review period.

 

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Similarly, Finance sub-index (+4.07%) went up with share prices of Reliance Finance (+Rs 35.1), Goodwill Finance (+Rs 33) and Shree Investment Finance (+Rs 33) seeing an incline. The Development Bank sub-index (3.75%) saw a rise in the share values of Shine Resunga Development (+Rs 29), Lumbini Bikas (+Rs 25.3) and Miteri Development (+Rs 23).

Others sub-index (+2.95%) followed suit with increase in share value of Sonapur Minerals and Oil (+Rs 38.1), Nepal Telecom (+Rs 20.6), and Nepal Reinsurance Company.  (+Rs 19.1). Manufacturing and Processing sub-index (-6.84%) also witnessed a growth in the share prices of Unilever Nepal (+Rs 6,900) and Ghorahi Cement (+Rs 39.9).

On the other hand, the remaining two sub-indices ended in the red zone. Commercial Bank sub-index (-0.52%) witnessed a decline in the share value of Nabil Bank (-Rs 44.6), NIC Asia (-Rs 12), and Siddhartha Bank (-Rs 11.3). Finally, Microfinance sub-index (-3.30%) lost the most with a decrease in share prices of Upakar Microfinance (-Rs 200), Aatmanirbhar Microfinance (-Rs 185), and Nesdo Sambridha Microfinance (-Rs 171).

News and Highlights

While Securities Board of Nepal (SEBON) has not approved the initial public offerings (IPOs) of any new company during the period, it did see the issuance of various IPOs that had been approved during the preceding one. Most notably, Sarbottam Cement issued its IPO through a book building process, making it the first in Nepal. It has completed the bidding process for Qualified Institutional Investors and will be launching its IPO to the general public at Rs 360.90 per share with a minimum requirement of 50 units. SEBON has also added the IPO of Hotel Forest Inn worth Rs 980 million under preliminary review. NIC Asia Capital has been appointed its issue manager.

Outlook

A majority of the sub-sectors had some recovery compared to the previous period. Despite the current surge, investors remain vigilant for potential indicators of a trend reversal that could trigger a market rebound as economic activities start to pick up post festivities and as listed companies continue to declare and distribute dividends from last year’s earnings.

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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