Saturday, June 6, 2009

Nespe defies market fundamentals

The shareholders of the development banks sub-group gained this week defying the market fundamental. The development banks sub-group -- despite the central bank's decision to send Nepal Development Bank (NDB) to liquidation -- flared by 12.34 points to close at 769.25 points. Contrary to the surge in the development banks sub-group's index, the market pundits were predicting the drop in the development bank's index after the bold decision of the central bank.
The development banks and hotels sub-groups are the only two sub-groups -- out of nine sub-groups -- that witnessed growth this week. The hotels sub-group surged by 1.45 points to close at 366.45 points.
However, the Nepse plunged below 700 points as other seven sub-groups indices dropped pulling the Nespe down by 19.74 points to close at 698.88 points from last week's closing of 718.62 points. The plunge in Nepse justified the 'unnatural growth' a week ago.Two sub-groups -- trading and manufacturing -- indices remained unchanged at 281.78 points and 434.32 points as Nepse didnot see any transactions of their shares this week.
The sole secondary market might still not see any encouraging growth in a couple of weeks as two new primary issues worth Rs 495.6 million -- much awaited Chilime Hydropower (worth Rs 230.4 million) and Vibor Bikas Bank (worth Rs 265.2 million) -- are in pipeline.
The market this week gained on only one day -- out of the five day trading -- on Tuesday. The other four days, Nepse lost as the present uncertainty is making the investors nervous and they are looking for exit.
The transaction amount this week has also gone down by 5.56 per cent to Rs 345.18 million as against the last week's fall of 13.12 per cent to Rs 278.4 million. The contribution of Group-A companies -- the blue-chip shares -- also went down by 49.01 per cent as against last week's 67.78 per cent.
The shareholders of others, commercial banks, hydropower companies, insurance companies, and finance companies sub-groups lost. The others sub-group lost a whopping 41.11 points to 675.56 points and commercial banks sub-group followed with a loss of 19.44 points to 717.11 points.Similarly, hydropower companies' sub-group plunged by 17.27 points to 861.39 points and insurance companies sub-group shed 6.43 points to 644.35 points. The finance companies sub-group witnessed a marginal loss of 0.62 point as it closed at 761.25 points.
The 78-scrip sensitive index -- considered the blue chip shares in the domestic market -- also lost 3.67 points to 186.64. The float index -- calculated on the basis of real transactions -- shed 1.50 points to close at 67.15 points.
This week NCC Bank (with Rs 40.75 million) topped the chart in terms trading amount followed by Standard Chartered Bank Nepal (with Rs 36.49 million), Prabhu Finance (with Rs 36.45 million), Paschimanchal Bikas Bank (with Rs 27.44 million) and Bank of Kathmandu (with Rs 19.21 million).Similarly, in terms of share units traded NCC Bank topped the chart as its 1,35,000-unit of shares changed hands. But in terms of number of transactions, Prabhu Finance topped the chart with 2274 transactions.
The sole secondary market this week also listed 10 million-unit of shares each of -- Bank of Asia Nepal and Citizens Bank International -- that would see their transaction after seven days.


Nepse announces 20 per cent cash dividend
KATHMANDU: The 27th AGM of Nepal Stock Exchange Ltd (Nepse) decided to distribute 20 per cent cash dividend from the profit of fiscal year 2007-08. This is the first time the Nepse has announced cash dividend. Chairman of Nepse Dr Narayan Prasad Paudel proposed the cash dividend in the AGM as the Nepse has posted Rs 70.9 million net profit -- an increase by 258 per cent in comparison to the previous year -- during the fiscal year 2007-08.

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