Dismal week at Nepse

The Nepse index (-3.21%) experienced a dismal week as the index closed at 565.86 points this week. The downtrend persisted as all the sub-indices plunged further. Despite the Maoist nationwide protest which commenced this week, there was an increase in the weekly turnover (Rs.311,666,279). On Thursday, it came to light that SEBON will approve the 19% conversion of promoter shares into ordinary shares and has formed a high-level committee to consult on the conversion process.



The Commercial Banking sub-index (-4.29%) made a major descent as leading banking stocks declined. Laxmi Bank (-Rs 344), the biggest loser of the week post its 5:2 rights book closure, Everest Bank (-Rs 110), and Nabil Bank (-Rs 175) were the highest losing commercial banks. Although companies like People´s Finance (+Rs 30) and General Finance (+Rs 37) which has started issuing 1:1 right shares from November 10 posted the top gains of the week, losses in the stock prices of API Finance (-Rs 24) and International Leasing and Finance Company (-Rs 64) which announced 26.32% cash dividend, caused losses in the Finance sub-index (-1.15%). Siddhartha Development Bank (+Rs 20) which declared 5% cash dividend registered one of the highest gains. Nevertheless, depreciation in the share prices of Annapurna Bikash Bank (-Rs 16), Ace Development Bank (-Rs 9) and the majority of the development banks brought down the Development Banking sector (-1.59%). United Insurance Company lost heavy points moving the insurance sector down (-0.67%). The ´Others´ sub-index (-2.78%) also slipped as Nepal Telecom (-Rs 15) shed value. Similarly, the Hydropower sector sub-index (-1.34%) declined because of the fall in the share price of Chilime Hydropower (-Rs 5).



Several declarations were made this week. Prime Commercial Bank (+Rs.19) will issue 10% bonus shares and 0.526% cash dividend. Kathmandu Finance (+Rs.6) has proposed 20% bonus shares and and Premier Finance (-Rs.6) has proposed 10% bonus shares and 0.526% cash dividend. Nepal SBI issued a notice clarifying that the book closure dates of both its right and bonus shares will be on the same day and is yet to be decided. Nepal Rastra Bank has ruled that any new subsidiary company that financial institutions form separately to carry out merchant banking activities will have to issue at least 30% shares to the general public. Technical analysis indicates downtrend signals, as do investor concerns over the offloading of 19% promoter shares.

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