Nepse drops over low cash dividend

KATHMANDU, Aug 25: Announcement of nominal cash dividend by Nepal Investment Bank Ltd (NIBL) triggered further loss in already slowing Nepal Stock Exchange (Nepse) index. The Nepse, the indicator of investors´ confidence in stock market, shed 2.09 percent or 14.47 points to close at 678.87 points at the end of Tuesday´s trading. “Meager cash dividend of Rs 20 per share announced by NIBL has discouraged investors and spurred selling pressure in the secondary market on Tuesday. The announcement also sent negative message to investors of other companies,” Nanda Kishore Mundada, president of Nepal Stock Brokers Association told myrepublica.com. Price of NIBL´s per unit share dropped by 114 to Rs 1035 on Tuesday.Mundada also said rumor of Securities Board of Nepal (Sebon) permitting promoters to lower their equity participation by selling 19 percent of total shares also contributed to the decline. “If permission is given to sell promoter shares, number of share would be doubled in the secondary market, resulting in overflow of shares in the secondary market,” said Mundada.Banking group, a key trading group in stock market, saw its sub-index dropped by a whopping 23.42 points to close at 707.82 points. The slump in Banking group´s sub-index was contributed by the decline in share prices of major banks such as NIBL, Nabil, Standard Chartered and Kumari Bank. Similarly, Development Bank and Finance groups´ sub-indices also wend down by 0.58 points and 5.89 points to end at 703.15 points and 868.77 points respectively. Insurance and Others group also saw their sub-indices dip by 1.66 points and 8.22 points to close at 640.29 points and 649.72 points respectively.Total turnover of stocks declined to Rs 86. 36 million with 123,722 units of shares and 55 scripts being traded through 964 transactions during Monday´s trading. Total market capitalization also dropped to Rs 471.49 billion, down from Rs 481.55 billion recorded on Monday. - REPUBLICA