Mutual funds implied the principle "Sell when the market is greedy" back in Baisakh! Institutional investors liquidated their shares and increased their bank balance to Rs 4.35 arba!

Tue, Jun 4, 2019 1:44 PM on Exclusive, Mutual Fund, Stock Market, Latest,

The start of a new year is usually the start of a fresh year. In Nepalese stock market, Biasakh month has always been known as the April effect when stock market rises. This rise is often attributed to the optimism among investors due to a new start of the year. So, SS Pro has guided us to analyse the sentiment of institutional investors during the same month. Now, let us find out the purchases, sales and holdings of these institutional investors in Baisakh.

The mutual funds have an investment in listed/ unlisted funds of Rs 7.68 arba in Baisakh compared to Rs 7.24 arba in Chaitra. Similarly, mutual funds have increased bank balance from Rs 3.57 arba in Chaitra to Rs 4.35 arba. This shows that the mutual funds have liquidated shares and thus, increased their balance. Mutual funds investment in debentures and public shares amounts to Rs 58.79 crores. Similarly, the funds also have invested 1.13% in primary shares which amounts to Rs 14.62 crores.

 

The top investments by mutual funds irrespective of sectors in the month of Baisakh are as follows:

The top most bought stocks in Baisakh by the overall mutual fund industry are as follows:

The top most sold stocks in Baisakh by the overall mutual fund industry are as follows:

Sector-wise Breakdown

Investment in commercial banking industry accounts for the highest sector-wise investment of Rs 2.05 arba. Likewise, they have investment of Rs 84.02 crore in shares of nonlife insurance companies, accounting for the second-highest sector-wise value. Microfinance companies sector stands at the third highest investment priority for mutual funds with an investment worth Rs 81.04 crores. 

 

Commercial banks:

Among the commercial banks, Nepal Bank Limited (NBL) is seen as the top priority for investment by mutual funds. It accounts an investment worth Rs 23.70 crores. Everest Bank Limited (EBL) stands at the second position with investment of Rs 15.78 crores. Global IME Bank Limited (GBIME) stands with the investment of Rs 15.44 crores.

 

Development Banks:

As for the development banks, Muktinath Bikas Bank Limited (MNBBL) has the highest investment preference among mutual funds. The mutual funds have invested an amount worth Rs 11.59 crores. Kailash Bikas Bank Limited (KBBL) is seen in the second position with an investment worth Rs 4.28 crores. Garima Bikas Bank Limited (GBBL) has an investment of Rs 4.26 crores at the third position.

Microfinance companies:

Among the listed microfinance companies Chhimek Laghubitta Bikas Bank Ltd. (CBBL), Sana Kisan Bikas Bank Limited (SKBBL), and Deprosc Development Bank Ltd. (DDBL) were the top three investment priorities for mutual funds. Mutual funds invested Rs 13.35 crores in Chhimek Laghubitta Bikas Bank Ltd. (CBBL), Rs 13.13 crores in Sana Kisan Bikas Bank Limited (SKBBL), and Rs 10.63 crores in Deprosc Development (DDBL).

 

Life Insurance companies:

Among the life insurance companies in Nepal, Nepal Life Insurance Company Limited (NLIC), National Life Insurance Company Limited (NLICL) and Life Insurance Company Limited (LICN) are the investment companies of top priorities for mutual funds. Mutual funds schemes have around Rs 24.32 crore investments in NLIC, Rs 18.31 crore investments in NLICL and Rs 14.17 crores investment in LICN.

 

Non-Life Insurance companies:

Among the non-life insurance companies in Nepal, Sagarmatha Insurance Company Limited (SIC), Shikhar Insurance Company Limited (SICL) and NLG Insurance Company Limited (NLG) are the investment companies of top priorities for mutual funds. Mutual funds schemes have around Rs 18.96 crore investments in SIC, Rs 12.31 crore investments in SICL and Rs 11.37 crores investment in NLG.

 

Hydropower companies:

The inclination of investment in hydropower companies for mutual funds was in Chilime Hydropower Company (CHCL) with an investment of Rs 14.32 crore, Butwal Power Company Limited (BPCL) with an investment of Rs 10.70 crore and Upper Tamakoshi Hydropower Company (UPPER) with an investment of Rs 78.35 crore.

Finance:

As for finance companies, the top three investments were Manjushree Finance Limited (MFIL), ICFC Finance Limited (ICFC) and Goodwill Finance (GFCL). Mutual funds invested an amount of Rs 48.41 lakhs in Manjushree Finance, Rs 25.78 lakhs in ICFC Finance and , Rs 25.77 lakhs in Goodwill Finance Limited.

Hotels:

Among the three listed hotels in NEPSE, mutual funds have given higher priority to Oriental Hotels Limited (OHL) with an investment of Rs 2.00 crores.

 

Mutual fund:

The mutual fund schemes also invest in other mutual funds. The mutual funds have preferred as the Siddhartha Equity Oriented Scheme (SEOS) best scheme for investment. It has an investment that accounts to Rs 1.58 crore. NMB Sulav Investment Fund-1 (NMBSF1) falls under the second highest investment value mutual fund. It has an investment of Rs 1.46 crores. Finally Citizens Mutual Funds (CMF1) has a third highest investment of Rs 1.17 lakhs.

Manufacturing & Production:

Mutual funds have invested Rs 64.80 lakhs in Shivam Limited (SHIVM) and Rs 14.59 lakhs in Unilever Company Limited (UNL) as of Baisakh, 2075.

Others:

As for the others sector, mutual funds have invested Rs 25.01 crores in Nepal Doorsanchar Company Limited (NTC), Rs 11.61 crores investment in Citizen Investment Trust (CIT),  and Rs 2.47 crores in Jalabidyut Lagani Tatha Bikas (HIDCL).

 Preference shares and Promoter shares:

Similarly, the preference and promoter shares as per the choice of mutual funds are:

 

 

Hence, the overall analysis draws the top companies preferred by mutual funds for investment. This article might be helpful to the aspiring investors in the secondary market. What are your views on the mutual funds? Do you think the top investment decisions made by mutual funds are backed up with rationality? Please write to us in the comment section below.

(Disclaimer:  Any kind of information that is provided in the article should not be used as a sole advice or recommendation by investors in order to design their investment portfolio. So, before taking steps for any kind of the information, the investors are required to base their judgment on their own financial analysis, appropriateness of the information and seek independent financial advice. The information of the company has been taken from the authorized sources such as website of the company, NEPSE, financial reports and press releases of the companies so, any changes not updated in these may differ in the analysis.)