NEPSE BREACH 1050 LEVEL; MFIs AND BANKING SCRIPS WITNESS MASSIVE DEMAND

Sharesansar, 20th July:

Buying spree in microfinance and banking and financial institutions’ shares propelled Nepse index beyond the resistance of 1050 level.  

The benchmark index rallied by 29.08 points to settle at 1074.97 level today. Last time market, hovered over 1050 level was back in September, 2008.

“The indication of raising the paid-up capital of microfinance institutions operating in districts in financial hubs by the new monetary policy on last Friday proved to be a driving factor for many MFIs scrips today,” says one of the brokers.

Most of the microfinance scrips today traded near circuit level. Chhimek Laghubitta Bikas Bank Limited (CBBL), Nerude Laghubita Bikas Bank Limited (NLBBL) and Nirdhan Utthan Bank Ltd. (NUBL) were the scrips that closed with circuit level gain of 10 percent.

Likewise, Swarojgar Laghu Bitta Bikas Bank Ltd. (SLBBL), Sana Kisan Bikas Bank Ltd (SKBBL), Swabalamwan Bikash Bank (SWBBL), Rural Microfinance Development Centre Ltd. (RMDC) and Kalika Microcredit Development Bank Ltd. (KMCDB) were among rest of the microfinance institutions to close with nearly ten percent gain.

Driven by such demand in microfinance companies, the Development sector today propelled by 30.78 points.

Similarly, the demand in commercial banks’ shares was also in similarly nature after the NRB stands on paid up capital.

 “The strong indication last Friday from the central bank, when announcing the new monetary policy that it is very strict when it comes to paid-up capital requirement proved to be catalyst for those commercial banks that are yet to shore up their paid-up capital to Rs 2 arba in today’s market,” says one of the investors.

The NRB on Friday through new monetary policy has indicated that it will not allow commercial banks under Rs 2 arba capital to issue cash dividend and expand their branches. Further, these BFIs will also face restriction on deposit and loan mobilization.

The strong stand by NRB on paid up capital proved to be driving factor for these banks as Everest Bank Ltd  (EBL), Laxmi Bank Limited (LBL), Kumari Bank Ltd (KBL), Nepal Credit And Com. Bank (NCCB), Lumbini Bank Ltd. (LUBL) and Siddhartha Bank Limited (SBL) all made double digit surge.

The positive sentiment of investors towards these scrips also helped uplift the remaining listed banking shares which drove the Banking sector up by 35.87 points.

Likewise, rest of the sub-indices scrips were also well received as Finance inclined by 11.41 points, Hotels increased by 25.72 points, Manufacturing gained 14.84 points, Insurance advanced by 84.04 points and Hydro climbed 15.57 points.

Along with positive transition in overall market, the turnover amount too witnessed astounding climb as the figure tallied at  Rs 966.01 million compared to Rs 690.42 million of last trading day.

The company with the highest turnover in today’s session was Nepal Bank Limited (NBL), which closed at 490. Altogether, 248,332 share units were traded through 197 transactions worth Rs 118,416,182.

All in all, the scrips of 150 companies were traded, out of which 127 scrips gained, four remained intact and 19 scrips lost.