Heafty dividends propels Microfinance sector
Sun, Jan 3, 2016 2:55 AM on Latest, Exclusive, Stock Market,
In Nepal Stock Exchange Limited, the charm towards microfinance sector has increased. The increased charm in microfinance sector is due to the high dividends provided by microfinance companies.
There is also a rumour in the market regarding rise in paid up capital of microfinance companies. The rumour has contributed towards the increase in charm in microfinance companies.
Let us look at the price of few of the selected microfinance companies on October 01, before the book closure day and at present. We have selected Chimmek Laghubitta Bikas Bank Limited (CCBL), Nirdhan Uthhan Bank Limited (NUBL), Swabhalamban Bikas bank Limited(SWBBL), Diprox Development Bank Limited (DDBL), Nerude Laghubitta Bikas Bank Limited and Summit Microfinance Development Bank Limited(SMFDB) for this study.
| CBBL | NUBL | SWBBL | DDBL | NLBBL | SMFDB | |
| Stock Dividend (%) | 40 | 48.81 | 42 | 50 | 44 | 41 |
| Cash Dividend (%) | 12.7 | 10.13 | 10.63 | 2.63 | 2.32 | 2.19 |
| LTP on October 1 (Rs/unit) | 1700 | 1740 | 2191 | 1841 | 1840 | 1989 |
| LTP on Book Closure (Rs/unit) | 2046 | 2150 | 2392 | 2299 | 2460 | 2825 |
| LTP after Adjusted Price (Rs/unit) | 1515 | 1570 | 1686 | 1490 | 1770 | 2003 |
| LTP on December 31 (Rs /unit) | 1650 | 1604 | 1848 | 1674 | 1877 | 2060 |
The above data shows the recent increase in share price of microfnace has been due to the dividends announced. Summit Microfinace had the highest difference in share price of Rs 836/unit as compared on October 01 and on the day of its book closure.
The share price of Kalika Microcredit Development Bank Ltd. is increasing in hope of nice dividend from the microfinance.
Microfinances such as Vijaya laghubitta Bittiya Sanstha Ltd, Mirmire Microfinance Development Bank Ltd. have.not declared any dividends or right shares. However, their share price have increased well above the expected level. This indicates that the investors might be investing on whim of various rumors surrounding the microfinance.
