Saturday, September 5, 2009

The good stocks

On the last trading day of last week @ per unit rate:
Standard Chartered Bank Nepal's 1,513-unit shares -- between Rs 5,446 and Rs 5,300.
Nabil Bank's 2,295-unit shares -- between Rs 4,325 and Rs 4,200.
Everest Bank's 140-unit shares -- between Rs 2,360 and Rs 2,295.
Nepal SBI Bank's 1,876-unit shares -- between Rs 1,685 and Rs 1,615.
Himalayan Bank's 471-unit shares -- between Rs 1,600 and Rs 1,560.
Bank of Kathmandu's 3,638-unit shares -- between Rs 1,600 and Rs 1,540.
Nepal Investment Bank's 1,546-unit shares -- between Rs 932 and Rs 907.
These are some of the expensive stocks of commercial banks that can push up or pull down Nepse but investors still prefer them. "They prefer banks' shares because of growth of wealth," said share analyst Rabindra Bhattarai. "Banks' shares give better returns," he said adding that these shares are still not expensive in comparison to other shares -- such as those which have 400 times the price earning ratio (P/E ratio) in the domestic secondary market.
Investors think of returns while buying shares, apart from good corporate governance. They are after shares of Standard Chartered Bank Nepal, Nepal Investment Bank, Nabil Bank, Himalayan Bank, Nepal SBI Bank because of their good corporate governance, growth and returns.
"Between 2004 to 2009, Nabil has achieved unprecedented growth in all major parameters. Its net worth increased by 134.01 per cent to Rs 3,468 million," said Nabil Bank chief executive officer Anil Shah.
Nepal Bangladesh Bank (NBB) is an example of how bad governance turns good stocks bad overnight. NBB's 11,136-unit shares were traded this week between Rs 300 and Rs 290. Once its shares were traded at Rs 3,400 per unit, but bad governance dragged it to fiscal purgatory in a jiffy, although its improving these days.

How and why of returns
* You bought 10-unit shares of Standard Chartered during its IPO in 1988-89. Today, you have 282-unit shares -- including the fiscal year 2008-09's proposed dividends -- and received cash dividends of Rs 97,425.
* You bought 10-unit shares of Nabil bank during its IPO in 1984. Today, you have 191-units and have already received Rs 72,747 cash dividends -- including fiscal year 2008-09's proposed dividends.
* You bought 10-unit shares of Nepal Bangladesh Bank during its IPO. Today, you have 150-unit shares including rights shares and bonus.

No comments: