Were mutual funds able to predict the rising NEPSE in the month of Chaitra? Know their purchases

NEPSE had just begun to increase at the end of Chaitra last year. Did the mutual funds buy stocks and reap benefits? How accurate were mutual funds in predicting the rise of stock market? It will be interesting to see what shares did nine merchant banks running 13 mutual fund schemes opted in the month of Chaitra, 2075.

These funds have an investment in listed/ unlisted funds of Rs 7.24 arba in Chaitra compared to Rs 7.20 arba in Falgun. Similarly, mutual funds have increased bank balance from Rs 3.5 arba in Falgun to Rs 3.57 arba. Mutual funds investment in debentures and public shares is stagnant at Rs 66.49 crores. Similarly, the funds also have invested 2.05% in primary shares which amounts to Rs 26.51 crores.

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

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

The top most sold stocks in Chaitra 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 2.55 arba. Likewise, they have investment of Rs 90.98 crore in shares of microfinance companies, accounting for the second-highest sector-wise value. Non-life insurance companies sector stands at the third highest investment priority for mutual funds with an investment worth Rs 85.09 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 40.68 crores. NMB Bank Limited (NMB) stands at the second position with investment of Rs 26.83 crores. Everest Bank Limited (EBL) stands with the investment of Rs 17.45 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 10.44 crores. Garima Bikas Bank Limited (GBBL) is seen in the second position with an investment worth Rs 4.69 crores. Kailash Bikas Bank Limited (KBBL) has an investment of Rs 4.13 crores at the third position.

Microfinance companies:

Among the listed microfinance companies, Sana Kisan Bikas Bank Limited (SKBBL), Chhimek Laghubitta Bikas Bank Ltd. (CBBL), and Deprosc Development Bank Ltd. (DDBL) were the top three investment priorities for mutual funds. Mutual funds invested Rs 16.13 crores in Sana Kisan Bikas Bank Limited (SKBBL), Rs 14.45 crores in Chhimek Laghubitta Bikas Bank Ltd. (CBBL) and Rs 11.45 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 Rs27.04 crore investments in NLIC, Rs 18.39 crore investments in NLICL and Rs 16.68 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 20.31 crore investments in SIC, Rs 12.95 crore investments in SICL and Rs 12.11 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 14.26 crore, Upper Tamakoshi Hydropower Company (UPPER) with an investment of Rs 11.19 crore and Butwal Power Company Limited (BPCL) with an investment of Rs 10.38 crore.

Finance:

As for finance companies, the top three investments were Goodwill Finance (GFCL), Manjushree Finance Limited (MFIL) and ICFC Finance Limited (ICFC). Mutual funds invested an amount of Rs 25.77 lakhs in Manjushree Finance, Rs 25.19 lakhs in Goodwill Finance Limited and Rs 14.39 lakhs in ICFC Finance.

Hotels:

Among the three listed hotels in NEPSE, mutual funds have given higher priority to Oriental Hotels Limited (OHL) with an investment of Rs 3.13 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 1.68 crores in Bottlers Nepal (Terai) Limited (BNT) and Rs 79.35 lakhs in Shivam Limited (SHIVM) as of Chaitra, 2075.

Others:

As for the others sector, mutual funds have invested Rs 32.67 crores in Nepal Doorsanchar Company Limited (NTC), Rs 18.76 crores investment in Citizen Investment Trust (CIT),  and Rs 3.22 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.)