Commercial banks, hydro companies propel Nepse

The share holders of commercial banks and hydropower companies gained today as except for the two sub groups all others lost.

The banks sub group propelled the secondary market by 3.84 points to close at 486.6 points after it saw heavy trading in some of the commercial banks. Sunrise Bank (12,340-unit), Lumbini Bank (5,379-unit), Bank of Kathmandu (4,268-unit), Prime Commercial Bank (3,343-unit), Nepal Investment Bank (2,879-unit), NIC Bank (2,255-unit), Kumari Bank (1,469-unit) and Laxmi Bank (1,104-unit) pushed the banking index up by 5.94 points to close the banks sub group at 468.92 points.

Similarly, Butwal Hydropower (2,196-unit) and Arun Valley Hydropower (1,294-unit) along with Chilime Hydropower (400-unit) shares were traded at the market, pushing the sub group by 2.04 points to 726.13 points.

However, the Asian Life Insurance that saw 6,220-unit of its shares being traded could not lift the insurance sub group as the sub group lost 0.37 point to close at 569.58 points.

Meanwhile, the year on year (y-o-y) Nepse index declined by 32.74 per cent to 444.76 points in the nine months of 2009-10. The index stood at 661.27 in the same period last year.

Likewise, Nepse sensitive index (based on July 2006) stood at 108.65 points in mid April, which was 176.17 points in the same period last year.

The float index -- calculated on the basis of final transaction as of August 24, 2008 as base market value -- remained at 41.88 in mid-April, a contraction of 35.15 per cent compared to the same period last year, according to the central bank's data.

The y-o-y market capitalisation also declined by 18.21 per cent to Rs 344 billion in mid-April. The ratio of market capitalisation to GDP stood at 31.80 per cent, said the central bank. "It was 43.87 per cent in the same period last year."

Of the total market capitalisation, bank and financial institutions accounted for 74 per cent followed by manufacturing and processing companies (1.8 per cent), hotels (1.1 per cent), business entities (0.3 per cent), hydropower (four per cent) and other economic sectors (18.7 per cent).

Total paid up capital of the listed companies stood at Rs 74.26 billion in mid-April -- an increase of 35.82 per cent over a period of one year. The increase was largely due to the additional listing of securities at the secondary market.

In the ninth month of current fiscal, additional securities worth Rs 20.15 billion -- ordinary share of Rs 3.59 billion, bonus share of Rs 3.43 billion, right share of Rs 5.96 billion and government securities of Rs 7.25 billion -- were listed at the Nepse.

The total number of companies listed at the Nepse has increased to 168 in mid-April compared to 157 in the same period last year.

Arun valley increases paid up capital

KATHMANDU: As per the decision of 14th AGM of Arun Valley Hydropower Development Company on December 29, 2009, the company has distributed 40 per cent of the paid up capital that is 686,000-unitbonus shares. The bonus share has been listed on the Nepse on June 9. After the bonus shares, the total paid up capital of the company is Rs 240.1 million. The company is also making a detailed study for a proposed hydro power project at Kabeli B-1, with a capacity of 25 MW. -- HNS

Lumbini Bank takes a turn around, churns profits

Lumbini Bank has set an example on how Nepalis themselves can turn a 'sick' financial institution into a sound and healthy one.
"When I took over the management of the bank four years back, it was in a state of collapse," said Shovan Deve Pant, CEO of the bank that was taken over by central bank in 2001 due to poor management. The central bank has clamped sanctions of March 7, 2006 restricting all major activities of the bank due to its high NPA, negative capital, serious noncompliances in various areas of accouting and income recognition and loan loss provisioning then.
After almost four years, Lumbini Bank has achieved capital adeqacy ratio of 24.23 per cent that is much above the regulatory requirement of 10 per cent and one of the best in the industry, he said adding that the NPA -- another barometer of the bank's financial health -- has come down to 4.66 per cent from 40.54 per cent in 2006.
The central bank has been restructuring the Nepal bank Ltd and Rastriya Banijya Bank with the grants. But still the restructuring of these banks are going on.
The zero deviation between unaudited and audited report of the bank for the fiscal year 2008-09 also reveals that the bank has improved its internal auditing. The bank has posted Rs 332.20 million profit in the fiscal year 2008-09.
"We now complied to all the central bank directives in regard to capital, NPA and increased income by more than five times in very difficult situations of emabargoes from NRB," Pant added.
After its financial health improved significantly, the Nepal Rastra Bank board has lifted all the sanctions from March 28, 2010. "We are proud to be one of the safest bank in Nepal's financial market," he added.