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beed’s take on the market

During the review period of February 28 to March 25, the Nepal Stock Exchange (NEPSE) index went up by a staggering 30.84 points (+1.21%) to close at 2584.97 points. Although the market had crossed the psychological threshold of 2,100 points from the previous few review periods and even reached an all-time high of 2,636.68 on February 18, the same spirit wasn’t seen in the current review period. As a result, the total market volume during the review period decreased substantially by 54.92% and stood at Rs. 96.540 billion.

Contrary to the previous review period, four of the sub-indices landed in the green zone while five fell in the red-zone.

Hydropower sub-index (+16.44%) was the biggest gainer as share value of Upper Tamakoshi (+Rs 211), Rairang Hydropower (+Rs 109) and Radhi Bidhyut Hydropower (+Rs 70) went up. Microfinance sub-index (+7.94%) was second in line with increase in the share value of Support Microfinance (+Rs 239), Mero Microfinance (+Rs 238) and Nirdhan Utthan Microfinance (+Rs 204). Finance sub-index (+0.67%) followed suit with rise in the share value of United Finance (+Rs 71) and Gurkha Finance (+Rs 27). The Non-life Insurance sub-index (+0.30%) also surged as share value of Siddharth Insurance (+Rs 65), Premier Insurance (+Rs 56) and IME General Insurance (+Rs 39) went up.

Meanwhile, the Manufacturing & Processing sub-index (-0.39%) witnessed decrease in the share value of Himalayan Distillery (-Rs 100) and Shivam Cement (-Rs 33). Development Bank sub-index (-2.51%) also saw fall in the share value of Corporate Development Bank (-Rs 46), Mahalaxmi Development Bank (-Rs 34) and Muktinath Development Bank (-Rs 20). Similarly, Others sub-index (-3.16%) decreased with drop in the share prices of Citizen Investment Trust (-Rs 343) and Nepal Telecom (-Rs 112). Life insurance sub-index (-3.50%) lost value with fall in the share values of Asian Life Insurance (-Rs 115), National Life Insurance (-Rs 80) and Surya Life Insurance (-Rs 56). Likewise, Commercial Bank sub-index (-4.49%) was the biggest loser with drop in share prices of Nabil Bank (-Rs 95), Everest Bank (-Rs 70) and Himalayan Bank (-Rs 46).

News and Highlights

In the public issue front, during the review period, Initial Public Offering (IPO) of Jyoti Life Insurance worth Rs 660 million was rolled out. SEBON has approved a debenture issuance proposed by Global IME Bank – ‘10 years 8.5%,Global IME Bank Debenture 2086/87’.

Also Sarbottam Cement and Reliance Spinning Mills have proposed to issue their IPO of six million and 1.4 million shares respectively through the book building method. Book building method allows a company to issue IPO at a higher price instead of issuing at Rs 100 per share. These are the first events of public offering being conducted through book building method. Global IME Capital has been appointed as the issue manager for Reliance Spinning Mills.

SEBON has added four IPO issues in the pipeline namely: Jeevan Bikash Microfinance worth at Rs 197.73 million, Sayapatri Hydropower at Rs 90 million, Balephi Hydropower at Rs 365.5 million and Green Ventures Hydropower worth Rs 625 million.

Outlook

Although the secondary market has attracted thousands of new investors into the capital markets resulting in bullish trend, the review period depicted a notable dip with the index sinking as trading volumes have weakened in the current trading sessions. As much as stock markets being cyclical is true, increased participation of companies, strong regulations and better trade settlement systems are needed to ensure a cumulative and sustained growth in the NEPSE index in the days to come.

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.

Review overview
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