After making a marginal gain of 0.37 points yesterday following whopping loss of 21.14 points or 2.04 percent  the day before, the benchmark index of Nepal Stock Exchange Limited (Nepse) again shed 17.91 points today to close at 995.71 levels.
This is the first time, the Nepse index has fallen below 1,000 level. The last time it was below that level was in July 7, when the index had closed at 995.19 level.
The market was brought down today basically by the banking group, with the highest market cap, though all the seven sub-indices suffered.
Apart from a handful of development banks and finance companies, two MFIs (First Microfinance and Nagbeli), a mutual fund (SIG-1), a hydropower company (BPCL), an insurance company (United Insurance) and the convertible preference of Everest Bank Limited, all the listed companies landed in the red zone.  NIC Asia and Mega Bank as well as one mutual fund (NBF-1) and a few development banks and finance companies, however, remained constant.
The selling pressure steadily increased ever since the only secondary share market of the country opened for trading at noon.
Despite the momentary slump, let us not forget that the turnover remains steady and encouraging. It stood at an impressive Rs 51.16 crore today, though slightly low than Rs 55.24 crore of yesterday—but much better than Rs 47.80 crore of Tuesday and Rs 39.59 crore of Monday.

How the commercial banks performed by the fourth quarter

Now that most of the companies listed with Nepal Stock Exchange Limited (Nepse) have already published their financials for the fourth quarter, it’s high time to recap how they fared, and most importantly, which companies fared the best.

We will start with the best performing companies in the banking group.

Among the commercial banks, most of the big ones such as Nabil, NIBL, Everest, SCB, HBL, and Nepal SBI continued to meet the expectations.  Among the state-run banks NBL outperformed while RBB posted a modest growth while ADBL came with upsetting figure largely due to a massive sum of Rs 3.3 arba it set aside as staff expenses.

Among the emerging ones, Global IME, NBB, NIC ASIA PCBL, Siddartha and Mega clearly outperformed  in the last fiscal year. 

Nabil emerged as the bank with the highest profit (Rs 2.33 arba) followed by NIBL as somewhat distant second with (Rs 19.57 arba), RBB (Rs 17.33 arba), Everest (Rs 1.54 arba and ADBL (Rs 1.50 arba).

Despite disappointing performance of a few of them, particularly ADBL and Grand, most of the commercial banks have done better in the last fiscal year – notwithstanding the fact that they had to struggle with surplus liquidity in the market and the central bank’s move to contain the spread rate within 5 percent.

This can also be substantiated from the fact that there were five banks with net profit of more than Rs 1.5 arba in the last fiscal year, as mentioned above, while there  only four banks to cross that mark in the previous fiscal year—ADBL (Rs 2.25 arba, Nabil (Rs 2.23 arba), NIBL (Rs 1.99 arba), RBB (Rs 1.51 arba).
Likewise, there were only seven banks with their net profit above Rs 1 arba in the previous fiscal year as compared to nine banks in the last fiscal year.

All in all, BFIs have posted robust growth in the last fiscal year despite all odds. Isn’t it something to cheer about!

source: sharesansar

Nepal Stock Exchange Limited has granted permission to one more stock brokers from today for trading.

Nepal Stock Exchange Limited has granted permission to one more stock brokers from today for trading.

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Regulators renew promises Nepse gains again

The stock market inched a little upwards following the renewed interest of regulators to promote the ailing securities market, as the Nepal Stock Exchange (Nepse) index gained 3.53 points on the first week of year 2012 -January 1 to 6.
Recently, High Level Financial Sector Coordination Committee has directed to start the operation of Central Depository System by mid-January. Likewise, the committee has decided to pursue full automation of Nepal Stock Exchange in order to stimulate the stock market.
Likewise, the committee is also going to impose measures to reduce the cost of trading in Nepse within next few months. Moreover, the government has also decided to increase the ceiling for source disclosure while trading in the share market from the current Rs 1 million to Rs 10 million.
These measures are expected to improve the performance of the market and attract investors in the coming days.
On Sunday morning the stock market opened at 312.94 points that went up to 318.74 points by the end of trading. Next two days saw the market go up to 324.15 points following the finance minister’s visit to stock exchange. However, the benchmark index could not sustain the ascent so that it slumped to 318.99 points on Wednesday. The index rested for the week at 319.55 points.
Nepse saw trading of 486,233 unit shares of 116 companies on 5788 transactions in five trading days, this week. This is 38.33 per cent decline in trading volume as compared to that of last week.
Among the total transactions, the trading of blue chip stocks of class ‘A’ companies consisted of 70.18 per cent amounting to Rs 87.8 million.
The sensitive index that measures the Class-A companies’ performance went up by 1.12 points reaching 79.32 points at the end of the week. The float index that measures the performance of actual shares traded also increased by 0.16 points to 25.43 points.
This week, hydropower, insurance, development banks and finance companies ended up in red.
Thanks to Nepal Telecom Others subgroup earned 15.27 points. Commercial banks went up by 3.78 points followed closely by manufacturing companies that earned 3.51 points.
Hydropower and insurance companies lost 5.74 and 5.04 points, respectively. Likewise, finance companies and development banks went down by 0.89 points and 1.2 points,
Everest Bank was forerunner both in terms of transaction amount and number of shares traded with the trading of 44,115 shares worth Rs 30 million. Gurans Life Insurance was fore runner in number of transaction with 589 transactions.
The top five performers of the week are Everest Bank (Rs 30.2 million), Bank of Kathmandu (Rs 16.26 million), Chilime Hydropower Company (Rs 9.30 million), Standard Chartered Bank (Rs 6.60 million) and Nabil Bank (Rs 4.50 million).


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New Brokers list: NEPSE

Nepal Stock Exchange Limited has published a list of new stock brokers.

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NRB to divest NEPSE stakes: Guv

NRB Governor Yubaraj Khatiwada has said that the central bank has decided to handover its stakes in Nepal Stock Exchange (NEPSE) to a strategic partner. At the function to handover CDS software, Khatiwada said the NRB plans to divest its shares in NEPSE to privatise the capital market. The central bank currently holds 35 percent shares in NEPSE. Securities Board of Nepal Chairman Surbir Poudel said the capital market would take new direction if NEPSE is privatised. “As all of us are well aware of the government’s conservative approach while running a business, it is necessary to bring in a private sector to run the capital market,” said Poudel.

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NEPSE hits five-year low

The Nepal Stock Exchange (NEPSE) this week dropped a massive 18.53 points to touch its five-year low of 358.04 points. The NEPSE index was at 363.56 points on Aug 6, 2006.

The capital market has been continuously dropping points since Sunday, the first trading day of the week. The market went down by 4.67 points, 7.31 points and 6.65 points, respectively, in the first three trading days of the week.

Positive political and policy-level developments such as appointment of a new prime minister, introduction of mutual fund regulations, moderation of margin lending provision and

introduction of Central Depository System (CDS) regulation have so far failed to revive the capital market.

In a bid to attract investors from across the country, the Securities Board of Nepal (SEBON), the stock market regulator, introduced CDS, which allows online trading and settlement of share transaction, but to no avail.

Investors say their confidence is shaking. “About 75 percent of investors are seeking to sell their shares. We can hardly find people who are willing to buy,” said Nanda Kishor Mundada, President of Nepal Stockbrokers’ Association.

Investors say economic factors are mainly responsible for the shaky investors’ confidence. “The capital market is the barometer of a country’s economy. Therefore, we cannot separate it from the current economic situation,” said Sunanda Bahadur Shrestha, general secretary of Investors’ Forum Nepal. “The gloomy economic scenario, including liquidity crunch in the banking system, power outages and sluggish

trading activities are responsible for the weakening investors’ confidence.”

Given the capital market heavily represented by the banking and financial institutions, liquidity crunch in the banking system will certainly affected it. Identifying the margin lending as a risky area, banks themselves are discouraging such lending. “Even if investors get loans, they will have to pay high interest rates beyond their expected return,” said Mundada. Recent episodes in the banking sector such as declaration of Gurkha Development Bank as crisis-ridden have also dented investor’s confidence, according to analysts. 

The proposal of amendment to the proposed Bank and Financial Institution Act (BAFIA), which seeks to limit promoters’ shares in banks and financial institutions at 5 percent from the current 15 percent, also contributed to the downfall of the stock market. “Fear of oversupply of shares in the market dented investors’ confidence, bringing down the market index,” said Shrestha of Investors’ Forum.

Aditi Shrestha, research and operation chief of BEED Invest, said the participation of institutional investors such mutual fund companies, Citizen Investment Trust, Employees’ Provident Fund and insurance companies could boost the NEPSE. Shrestha, however, stressed that the government should offer tax incentives for capital-based financing to bring in such investors and non-resident Nepalis.

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Share trading comes to a halt

Agitating employees of Nepal Stock Exchange (Nepse) shut down Nepse´s main server on Tuesday, bringing transactions at the sole secondary market in the country to a grinding halt.
Nepse Employees´ Association – the association of Nepse employees – has been organizing a series of protest against the management for the last nine days, putting forth nine-point demands, including amendment to existing Nepse by-laws, additional allowances and implementation of forced leave provision.

Nepse by-laws have not been amended for the last two decades. Nepse employees at present have been enjoying stock exchange allowance ranging from Rs 1,600 to Rs 2,500 per month and uniform allowance once a year.
They have demanded the management to provide forced leave for additional five days and uniform allowance twice a year.
Amid mounting pressure from the employees, Nepse chairman Tanka Paneru and general manager Shankar Man Singh on the day met Finance Minister Surendra Pandey, Revenue Secretary Krishna Hari Baskota and other senior officials at the Ministry of Finance (MoF) in a bid to resolve the problem.
“We formally informed the finance minister and other senior officials at the ministry about the ongoing stir. As we have been advised to resolve the problem through dialogue, we are holding talks with the agitating employees on Wednesday,” Singh told Republica. He also said the employees brought stock trading to a complete halt on the day.
The employees have been disrupting other administrative works at Nepse for the past eight days.
The Nepse board on Dec 6 had decided to address the demands put forth by the employees and immediately forward them to MoF for its consent.
“Implementation of the board decision has been delayed, as we haven´t got MoF´s consent so far,” Singh said.
Bagmati Labor Office has also directed Nepse board to implement the decision immediately.
Bhesh Raj Khanal, president of Nepse Employees´ Association, said they would continue to shut Nepse´s main server unless their demands are not addressed.


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SEBON forms bodies to work on master plan

The Securities Board of Nepal (SEBON) has formed a steering committee and six advisory groups under the coordination of its chairman Surbir Poudel to create policies to formulate a five-year master plan to develop the Nepali securities market. There will be nine members in the steering committee. Apart from Poudel, the steering committee contains six conveners from each advisory group and Mahendra Man Gurung, joint secretary at the economic affairs and policy analysis division (EAPAD) at the Ministry of Finance. Nabaraj Adhikari, planning and development department-head at SEBON, is member secretary of the steering committee.

The Nepali securities market regulator SEBON is set to develop a roadmap for the development of the domestic securities market with the technical assistance of the World Bank. Adhikari said that Richard Pratt, an international stock market expert from the World Bank, had already prepared a market assessment report. The steering committee will review it and make suggestions to Pratt considering the Nepali securities market’s fundamentals. Pratt is in Nepal on his second mission in connection with the five-year master plan. “Apart from the steering committee, each advisory group will work on the individual topics assigned,” said Adhikari.

Among the six advisory groups, Kedar Poudel, joint secretary at the Ministry of Law and Justice, will head the Legal Advisory Group. There are two other members in the group, a manager from the Nepal Stock Exchange (NEPSE) and the deputy director of SEBON. Similarly, the Securities Registration, Listing and Merchant Banking Business Advisory Group will be led by Pradeep Jung Pandey, vice president of the FNCCI.
source: ekantipur

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NEPSE sets up subsidiary to run CDS

The Nepal Stock Exchange (NEPSE) has established CDS and Clearing Limited, a subsidiary company to run the Central Depository System (CDS) in the domestic securities market.

The NEPSE established the company on its own after its earlier attempt to establish the subsidiary company along with other stakeholders failed.

Earlier, the NEPSE along with 17 commercial banks and Citizen Investment Trust had registered Nepal Central Depository and Clearing Limited (NCDC). However, it failed to make any headway due to the dispute between the stakeholders regarding the issue of capital infusion.

The NEPSE was trying to include Indian grant of around Rs 150 million as its stake in NCDC, however, other stakeholders, stating that the grant being meant for the country, had argued that NEPSE should put in its own money. With a paid-up capital of Rs 500 million, NCDC had aimed at starting the trial phase of CDS within the first month of 2011. The Indian grant was meant for software development of CDS.

The six-member CDS board is chaired by Tanka Paneru, who is also the chairman of NEPSE. Bijaya Gurung, manager of NEPSE, was appointed as a chief operating officer of CDS. Further, the company

will choose one stock market expert as a board member.

The board of directors of CDS and Clearing Limited include Shankar Man Singh, general manager of NEPSE, Trilochan Pangeni, executive director

of Nepal Rastra Bank, and Pramod Kumar Bhattarai, acting deputy general manager of NEPSE. After the company’s

establishment, NEPSE has started the process of setting up an office, acquiring funds for capital and procuring necessary hardware. NEPSE is also speeding up the process to prepare necessary bylaws to run the CDS, said a press release issued by NEPSE. CDS is expected to come into operation in mid-April.

After the installation of CDS, clearance and settlement of securities transactions will be executed electronically. CDS keeps electronic records of shares, debentures, treasury bills and treasury bonds,

stocks and other securities, replacing

physical certificates of securities. The paid-up capital of the CDS and Clearing Limited will be Rs 300 million.
source: ekantipur


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