One can apply for 10-unit of stock

The regulator of the capital market today relaxed the rule on the minimum number of stocks one can apply.
Securities Board of Nepal (Sebon) relaxed the rule and said that one can apply for 10 units of share in public offerings from current 50 units minimum. "The move is expected to benefit students, homemakers and other small investors," the board said, adding that it will make the share market more inclusive and accessible to a greater mass. "The directive will come into effect immediately."
“Sebon is hopeful that the move will help achieve the goal of ‘one citizen, one demat’ by providing access to all in the capital market,” the regulator's statement reads.

Nepse mulls extending trading hours

Nepal Stock Exchange (Nepse) has started preparation to extending share trading hours.
Currently, share trading is conducted for three hours – from 12 noon to 3 pm – five days a week, from Sunday to Thursday. However, Nepse has started homework for extending trading hour considering the growing demand in the market.
Issuing a press note, Nepse has also formally sought advice and suggestions from all stakeholders regarding extension of trading hours.
With increased demand and transaction in the stock market, Nepse officials say there is a room for extending the trading hour. Daily turnover, which used to over Rs 300 million a day, has climbed to over Rs 1 billion in recent weeks, thanks to technological advancement which has lured more investors into the secondary market.
On Monday alone, some 1.81 million units of shares of 140 companies worth Rs 1.55 billion were traded in the market. Despite this, the benchmark Nepse index shed 2.37 points to close the day's trading at 1,716.83 points. Market capitalisation also reached Rs 1,851.33 billion which is nearly 80 per cent of GDP.
Though, the Finance Ministry has been suspicious of the ever increasing transaction amount, and has also stepped up efforts to curb 'possible inflow' of illicit money into the secondary market, the market has been  bullish for the past one year.
Despite poor macroeconomic fundamentals, daily transaction of around Rs 1 billion everyday has raised regulator's brows, prompting regulators to caution investors against risks involved.
Nepse has however claimed that there is a need to extend trading hours as adoption of dematerialised forms of shares trading has attracted more investors to the market. "We want stakeholders to suggest to us pros and cons of the extension of trading hours,” Nepse added in the press note. The stock exchange has given stakeholders a week to send suggestions.
High demand for stocks, low bank interest rates and lack of other attractive investment opportunity in the country coupled with handsome return compared to other sectors is propelling the benchmark index to new highs almost every day. The other reason is attractive bonus and rights shares announced by most of the listed companies – especially banks and financial institutions and insurance companies – to meet the new paid-up capital requirement.
However, some say that the outdated software used by Nepse is hindering further growth and expansion of the country's only capital market.

Intra-day transaction hits record Rs 2.2 billion

Transaction sailed past the Rs 2-billion mark for the first time in the history of domestic share market today to hit an all-time high of Rs 2.2 billion.
Likewise, insurance companies and banks propelled the stock market not only to record the highest intra-day transaction today at the Nepal Stock Exchange (Nepse) but also pushed Nepse index to a record high of 1,614.15 points, up by 4.56 points or 0.28 per cent from yesterday.
With bullish trend in recent months, the stock market has been observing daily transactions of over Rs 1 billion for the last 20 days.
The stock market analysts attribute high demand for insurance and microfinance stocks in particular coupled with excess liquidity with banks and financial institutions for the upswing in the market.
Of the total trading volume, some 22 per cent or Rs 400 million transaction was recorded pf the promoter shares of Nepal Insurance Company. Likewise, large volumes of shares of Nepal Bangladesh Bank, Rural Microfinance Development Centre, Standard Chartered Bank Nepal and Everest Bank also traded hands today.
Similarly, biggest gainers of today were Bhargav Bikash Bank, Bottlers Nepal (Terai), Vijaya Laghubitta Bittiya Sanstha, Butwal Power Company and ILFCO Microfinance Bittiya Sanstha.
The rush to buy shares of insurance companies and also banks and financial institutions started after the Insurance Board and central bank instructed them to jack up their capital base. The banks have to increase their paid up capital to Rs 8 billion, whereas the Insurance board has asked life insurance companies to increase their capital base to Rs 5 billion from current Rs 500 million and non-life insurance companies to Rs 4 billion from current Rs 250 million.
Likewise, the market capitalisation also reached Rs 1,740 billion today, which is almost 80 per cent of the gross domestic production (GDP) of the country.
The share market trading that used to hover around million rupees per day has lately started to skyrocket because of fully automated share trading that fastened the securities ownership transfer and clearance services, the analysts claim.
The use of dematerialised stocks has enabled investors, who buy shares in bulk, to slice them in smaller portions before selling and profit booking, they said, adding that earlier investors used to buy shares – paper scrips – in bulk, used to pay split charges and wait for almost a month before selling them in small volumes. "With the introduction of dematerialised stocks, investors do not have to wait for long time to sell after splitting them, which has helped raise trading volume and transactions both.

Nepse scales new high, transaction also nears Rs 2 billion

Liquidity surplus in the banking system, attraction of rights and bonus shares of bank and financial institutions and insurance companies to raise their paid-up capital, and bullish sentiment of investors pushed the share market today to a new record high with the benchmark index approaching near 1,600 points. Along with continuing its bullish run, the market also posted record intra-day transaction of Rs 1.96 billion.
The Nepal Stock Exchange (Nepse) index jumped by 31.26 points to close at the market at 1,597.96 points due to commercial banks that gained 47.47 points.
All trading groups, except Hydropower, ended on the green zone today.
However, today's growth was led by commercial banks. A surge in the transaction of Nepal Bangladesh Bank shares pushed the commercial bank sub-index 47.47 points higher.
Nepal Bangladesh Bank has proposed issuing 80 per cent rights shares, which boosted the demand for its shares, resulting in the transaction of Rs 355.86 million today.
The share market has been in bullish trend for the past few months also due to the full-fledged implementation of dematerialised form of share trading from January 15.
Last Thursday too, the daily transaction at the stock market had set the record of high single day transaction of Rs 1.89 billion.
The excess liquidity in banking system and less investment opportunity has made the stock market lucrative investment opportunity, according ot the stock market analysts.
They also say that investors are finding it beneficial to invest in the stock market rather than park their hard-earned money in banks and financial institutions that offer average interest rates of around 5.8 percent on fixed deposits, let alone savings accounts that attract the minimum interest rates.
According to former president of Stock Brokers Association of Nepal (SBAN) Anjan Raj Poudyal the banks are offering margin lending at 8 to 9 percent interest rate as the banking system is flush with excess liquidity.
According to central bank, banks and financial institutions have extended a total of Rs 35 billion against share pledges in the first nine months of the current fiscal year, a jump by nearly Rs 11 billion compared to the corresponding period of the last fiscal year 2014-15. They had floated Rs 24 billion in margin lending in first nine months of the last fiscal year.
Till last year, average daily turnover of the stock market used to be around Rs 350 million only. However, the increase in turnover today is also due to bulk trading of promoter shares of some listed companies.

Nepal Life Insurance becomes 16th listed company to demat stocks

Nepal Life Insurance Company (Nepse-NLIC) has become the 16^th listed company to dematerialise its stocks at the CDS and Clearing Ltd today.

CDSC executive office Subodh Sharma Sigdel and Nepal Life Insurance chief executive Bibek Jha today signed an agreement to dematerialise the life insurance company's per unit Rs 100 paid up capital worth 63,75,000 units of stock, according to the CDSC that has already dematerialised 15 Nepse-listed comnpanies' stocks.   

Nepal Life Insurance had applied to the CDSC on November 1 to demat its stocks for the easier trading and transfer of the stocks through the CDSC.

The life insurance company has also been provided International Securities Indentification Number (ISIN). Nepal Life Insurance got NPE209A00004 as its ISIN.