Share prices drop below face value
KATHMANDU, June 12:
The bearish trend has pulled the share prices of almost two dozen companies below their face value by the end of the week’s trading.
Some eight development banks, five finance companies, one hydropower, one hotel, and a commercial bank’s share prices dropped below their face value of Rs 100 per unit.
Similarly, on the last trading day of the week Nepal Telecom’s share prices plunged to Rs 365 per unit, below its net worth of Rs 377.47 due to low investor’s confidence and uncertain political scenario. Net worth is the total assets minus total outside liabilities of a company.
Nepal Telecom shares sold at Rs 600 per unit by the company to the public has plunged by almost half making the investors nervous. However, market analyst Rabindra Bhattarai said that investors should buy Nepal Telecom shares that has distributed 40 per cent (Rs 5.58 billion) cash dividend this year and is expected to distribute 45 per cent cash dividend next year.
At this rate, an investor will get over 12 per cent return next year, he said, adding that Nepal Telecom is financially sound but weak in good governance.
Price to Earning (PE) ratio of Nepal Telecom stands at 4.45 per cent which is under-valued, Bhattarai said. If the PE ratio of any company is under 10, it is considered under-valued. It is a valuation ratio of a company’s current share price compared to its per-share earnings.
Nepal Telecom dragged others subgroup by 15.27 points within five regular trading days, when the commercial banks and hydropower — key players in the secondary market — lost 25.56 points and 19.48 points respectively to pull the Nepse down by 24.88 points to 308.88 points.
The week witnessed trading of 720,680 units of shares of 123 companies. The transaction amount has increased to 134.84 million this week from last week’s Rs 61.59 million. Of the total transaction this week, Class A companies dominated half of the transaction as they saw transaction worth Rs 61.59 million.
Chilime Hydropower topped the chart in terms of transaction amount with Rs 18.85 million, and NCM Mutual Fund topped in terms of shares number traded.
Source: THT
The bearish trend has pulled the share prices of almost two dozen companies below their face value by the end of the week’s trading.
Some eight development banks, five finance companies, one hydropower, one hotel, and a commercial bank’s share prices dropped below their face value of Rs 100 per unit.
Similarly, on the last trading day of the week Nepal Telecom’s share prices plunged to Rs 365 per unit, below its net worth of Rs 377.47 due to low investor’s confidence and uncertain political scenario. Net worth is the total assets minus total outside liabilities of a company.
Nepal Telecom shares sold at Rs 600 per unit by the company to the public has plunged by almost half making the investors nervous. However, market analyst Rabindra Bhattarai said that investors should buy Nepal Telecom shares that has distributed 40 per cent (Rs 5.58 billion) cash dividend this year and is expected to distribute 45 per cent cash dividend next year.
At this rate, an investor will get over 12 per cent return next year, he said, adding that Nepal Telecom is financially sound but weak in good governance.
Price to Earning (PE) ratio of Nepal Telecom stands at 4.45 per cent which is under-valued, Bhattarai said. If the PE ratio of any company is under 10, it is considered under-valued. It is a valuation ratio of a company’s current share price compared to its per-share earnings.
Nepal Telecom dragged others subgroup by 15.27 points within five regular trading days, when the commercial banks and hydropower — key players in the secondary market — lost 25.56 points and 19.48 points respectively to pull the Nepse down by 24.88 points to 308.88 points.
The week witnessed trading of 720,680 units of shares of 123 companies. The transaction amount has increased to 134.84 million this week from last week’s Rs 61.59 million. Of the total transaction this week, Class A companies dominated half of the transaction as they saw transaction worth Rs 61.59 million.
Chilime Hydropower topped the chart in terms of transaction amount with Rs 18.85 million, and NCM Mutual Fund topped in terms of shares number traded.
Source: THT
