Commercial Banks' Overall Market Capitalization Has Dropped By 32% Since The All Time High
Mon, Jun 6, 2022 5:12 PM on NEPSE News, Stock Market, Latest, Exclusive,
The fall of over a thousand points on the indicator, which had climbed as high as 3200 on 18 August, 2021, has had a negative influence on most companies' values. Commercial bank stocks have also suffered as a result of this. As the index has set a target of 3,200, the value of emerging commercial banks has been steadily dropping along with the declining market rhythm.
The share price of commercial banks, which account for the majority of market capitalization, has dropped by more than half since its peak. As a result, majority of the bank shares are presently trading for less than Rs 300 each.
On the basis of declining prices alone, investors who have bought at the highest price point of commercial banks have lost an average of 32%. The stock prices of 26* publicly traded commercial banks have dropped significantly since their peak.
| NEPSE INDEX 18th Aug, 21 | NEPSE INDEX 6th June, 22 | Difference (%) | Commercial Banks Index-18 Aug,21 | Commercial Banks Index-6 June, 22 | Difference (%) | Market Capitalization @18 Auy, 21 | Market Capitalization @6th June, 22 | Difference |
|---|---|---|---|---|---|---|---|---|
| 3,198.60 | 2,065.82 | -35.41% | 2,100.25 | 1,428.46 | -32% | 4,468,505 Millions | 2,941,141 Millions | -34.18% |
*Since Nepal Investment Bank (NIB) and Himalayan Bank Limited (HBL) trading was halted during the all-time high, the figure of 18th August 2021 for these bank are considered to be Rs. 460 per share and Rs. 484 per share as of May 13, 2021.
*Owing to its merger with Nabil Bank, the last transaction price (LTP) of NBB (Nepal Bangladesh Bank) is considered to be on Jan 13, 2022.
*Out of 27 commercial banks, Rastriya Banjiya Bank (RBB) is not Tradeable.
Commercial banks occupy the highest market capitalization. However, the market's decreasing trend cannot be sustained solely by the appeal of one subgroup. Furthermore, a drop in the stock price of the company with the highest share of the overall market capitalization instantly puts the index under pressure.
Commercial banks alone account for nearly 38% of overall market value, according to the latest estimates. Nabil Bank is responsible for 5% of the entire market capitalization. Due to their large capital, commercial banks are also considered low-risk businesses. Price activity shows that these stocks stay away from unexpected fluctuations.
Some investors who consider risk weighting only look at large-cap stocks like commercial banks. High-cap commercial bank stocks have a low level of volatility. Modest cap stocks have a tendency to react to every market change due to their small capitalization.
"The amount of market capitalization is in Rs Arba"
| S.N. | Symbol | Company |
18th August 21 (Rs) |
6th June, 22 (Rs) |
Difference | % of Difference | Share Capital of 18th Aug,21 | Market Capitalization at 18th Aug,21 | Share Capital of 6th June,22 | Market Capitalization at 6th June, 22 | Difference(Rs) | Difference(%) | Weightage |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | KBL | Kumari Bank Limited | 387 | 204 | -183 | -47% | 138,784,752.83 | 53.70 | 147,111,838.00 | 30.01 | (23.69) | -44% | 1% |
| 2 | PRVU | Prabhu Bank Limited | 473.5 | 240 | -233.5 | -49% | 113,470,573.21 | 53.72 | 127,087,042.00 | 30.50 | (23.22) | -43% | 1% |
| 3 | LBL | Laxmi Bank Limited | 401 | 214 | -187 | -47% | 106,956,896.30 | 42.88 | 115,513,448.00 | 24.71 | (18.16) | -42% | 1% |
| 4 | PCBL | Prime Commercial Bank Limited | 521.9 | 267 | -254.9 | -49% | 160,830,372.41 | 83.93 | 186,563,232.00 | 49.81 | (34.12) | -41% | 2% |
| 5 | NBL | Nepal Bank Limited | 564 | 294.8 | -269.2 | -48% | 126,367,592.98 | 71.27 | 144,059,056.00 | 42.46 | (28.80) | -40% | 1% |
| 6 | CZBIL | Citizens Bank International Limited | 415 | 221 | -194 | -47% | 125,769,168.30 | 52.19 | 142,009,741.00 | 31.38 | (20.81) | -40% | 1% |
| 7 | GBIME | Global IME Bank Limited | 484.4 | 267 | -217.4 | -45% | 216,325,030.00 | 104.78 | 237,957,533.00 | 63.53 | (41.25) | -39% | 2% |
| 8 | BOKL | Bank of Kathmandu Limited | 400 | 222 | -178 | -45% | 96,581,747.27 | 38.63 | 106,239,922.00 | 23.58 | (15.04) | -39% | 1% |
| 9 | SRBL | Sunrise Bank Limited | 382 | 220 | -162 | -42% | 94,879,444.91 | 36.24 | 101,188,928.00 | 22.26 | (13.98) | -39% | 1% |
| 10 | NMB | NMB Bank Limited | 474.9 | 264 | -210.9 | -44% | 163,259,616.00 | 77.53 | 183,667,068.00 | 48.48 | (29.04) | -37% | 2% |
| 11 | NCCB | Nepal Credit & Commerce Bank Limited | 361.9 | 210 | -151.9 | -42% | 103,145,170.37 | 37.32 | 111,396,784.00 | 23.39 | (13.93) | -37% | 1% |
| 12 | SANIMA | Sanima Bank Limited | 538 | 289.9 | -248.1 | -46% | 96,815,193.16 | 52.08 | 113,273,776.00 | 32.83 | (19.24) | -37% | 1% |
| 13 | EBL | Everest Bank Limited | 759 | 464 | -295 | -39% | 88,937,169.81 | 67.50 | 94,273,400.00 | 43.74 | (23.76) | -35% | 2% |
| 14 | MEGA | Mega Bank Nepal Limited | 382.9 | 229 | -153.9 | -40% | 146,549,643.64 | 56.11 | 161,204,608.00 | 36.91 | (19.19) | -34% | 1% |
| 15 | MBL | Machhapuchchhre Bank Limited | 433 | 258 | -175 | -40% | 90,530,944.40 | 39.19 | 102,571,560.00 | 26.46 | (12.73) | -32% | 1% |
| 16 | ADBL | Agricultural Development Bank Limited | 595 | 343 | -252 | -42% | 109,899,293.33 | 65.39 | 131,879,152.00 | 45.23 | (20.15) | -31% | 2% |
| 17 | SBL | Siddhartha Bank Limited | 573 | 347 | -226 | -39% | 109,622,995.19 | 62.81 | 125,244,272.00 | 43.45 | (19.35) | -31% | 2% |
| 18 | NIB | Nepal Investment Bank Limited | 460 | 287 | -173 | -38% | 162,573,294.79 | 74.78 | 183,075,413.00 | 52.54 | (22.24) | -30% | 2% |
| 19 | NICA | NIC Asia Bank Limited | 995 | 727 | -268 | -27% | 115,640,054.00 | 115.06 | 115,640,054.00 | 84.07 | (30.99) | -27% | 3% |
| 20 | CCBL | Century Commercial Bank Limited | 288.8 | 200 | -88.8 | -31% | 90,344,299.76 | 26.09 | 95,539,097.00 | 19.10 | (6.98) | -27% | 1% |
| 21 | CBL | Civil Bank Limited | 287 | 204.2 | -82.8 | -29% | 86,436,608.57 | 24.80 | 90,758,439.00 | 18.53 | (6.27) | -25% | 1% |
| 22 | NABIL | Nabil Bank Limited | 1,495.00 | 846 | -649 | -43% | 138,444,512.72 | 206.97 | 184,961,869.00 | 156.47 | (50.49) | -24% | 5% |
| 23 | SBI | Nepal SBI Bank Limited | 402 | 295.9 | -106.1 | -26% | 94,935,775.85 | 38.16 | 98,258,528.00 | 29.07 | (9.08) | -24% | 1% |
| 24 | SCB | Standard Chartered Bank Nepal Limited | 581 | 412 | -169 | -29% | 85,722,306.36 | 49.80 | 94,294,537.00 | 38.84 | (10.95) | -22% | 1% |
| 25 | HBL | Himalayan Bank Limited | 484 | 358.9 | -125.1 | -26% | 106,844,008.07 | 51.71 | 129,687,257.00 | 46.54 | (5.16) | -10% | 2% |
| 26 | NBB | Nepal Bangladesh Bank Limited | 495 | 399 | -96 | -19% | 90,048,214.29 | 44.57 | 100,854,000.00 | 40.24 | (4.33) | -10% | 1% |
| AVERAGE | 524.40 | 318.64 | 39% | 117,681,333.79 | 62.58 | 131,704,252.08 | 42.47 | (20.11) | -32% | ||||
| SUM | 13,634.30 | 8,284.70 | 3,059,714,678.54 | 1,627.33 | 3,424,310,554.00 | 1,104.25 | (523.08) | 38% |
As it falls under the regulatory scope of Nepal Rastra Bank, investments made in commercial banks are held by the shareholders for a long time. However, due to the declining market momentum, the size of investments in commercial banks has been shrinking.
Investors who purchased Kumari Bank shares at Rs 387 have already lost 44 percent of their overall investment. Although the return in the form of bonus (6% for last year) has given the investors some relief, the bank's share price has not escaped the pressure of price adjustment.
Despite the growth in the number of shares, commercial banks' overall market capitalization has dropped by around 32 percent. Due to all these factors, the NEPSE index has also declined by 35 percent since the all time high.
