Commercial banks' Q2 NPA almost doubles

The Non-Performing Assets (NPA) of commercial banks seem to have almost doubled in the second quarter of the current fiscal year. According to the unaudited financial figures of the second quarter of the current fiscal year, the average ratio of NPA to the performing loans in the second quarter of the current fiscal year is at 0.88 per cent which was 0.48 per cent in the corresponding quarter of the previous fiscal year.

The slowdown in realty and housing sector can be accounted for the surge in NPA of the commercial banks this season. The bankers have been suggesting the central bank Nepal Rastra Bank (NRB) to relax the ceiling on housing and real estate lending, citing the slowdown in realty to have affected the performance of banks as most of the commercial banks' loan portfolio is dominated by these sectors.

Among the unaudited financial statements released by the twelve commercial banks Bank of Asia Nepal (BoAN), Kumari Bank Ltd (KBL), Kist Bank Ltd (KIST), Siddhartha Bank Ltd (SBL), Global Bank Ltd (GBL), Laxmi Bank Ltd (LBL), Citizens International Bank Ltd (CZBL) and Prime Bank Ltd (PBL) are the commercial banks expected to report an increased NPA for the second quarter in comparison to that of corresponding quarter in the previous fiscal year. Standard Chartered Bank (SCBL), Nepal SBI Bank (SBI) and DCBL Bank Ltd (DCBL) are expected to report a drop in NPA in the review.

NPAs are one of the key indicators that gauge the financial strength of any bank or financial institution. NPAs for banks are nothing but loans gone sour. It is a loan that can not be recovered from the customer within stipulated time, especially those exceeding 90 days of the predetermined period. The NPA does not yield any income to the banks in the form of principal and interest payments. NPAs eat into the income of the financial institutions as the primary source of income of financial institutions are the interest payments by borrowers.

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End of Maoist protest buoyed stocks uphill

The local bourse that takes a trip of peak and trough for series of previous sessions has ended at green side again. After continuous five session uphill due to bottom fishing strategy, Nepse's optimistic press release, slightly loose margin lending policy by NRB and government's assurance to work in favor of stock market, Nepse slump down hefty in previous week discounting those noteworthy positive signals by UCPN-Maoist's fresh protest including SinhaDurbar Gherao and worry on floating of promoters shares in the market.

Amid the volatility and uncertainty, the secondary market has rebounds from aggressive red terrain to slight green side on Sunday led by banking and financial stocks. The end of second phase of Maoist's protest for a week has buoyed the investors' sentiments to demand for stock that were relatively cheaper on previous session due to anxious and turbulent environment. Consequently, at the closing bell the benchmark Nepse index added diminutive of 1.08 points or 0.19 percent to 566.94 in a volatile session though with low turnover and thinner units after plunging to low of 564 points.

"After the end of Maoist protest stock market ticked to higher note, this shows that investors are much more attentive to the political scenario of the nation amid other fundamentals" said Pritam Adhikari, who is currently employed in Investment Company of Nepal.

The three hour session trade in secondary market has brought cheers at investors' outlook who holds banking and finance scrip. Commercial bank index heaved up 4.63 points or 0.86 percent to 544.73 led by 8.32 percent surge in scrip price of Laxmi Bank (Rs. 612, +Rs. 47), 4.50 percent rise in share price of Machhapuchchhre Bank (Rs. 348, +Rs. 15) along with other key commercial banks, while finance added 3.41 points or 0.57 percent to 601.54 led by 7.77 percent rise in price of General Finance (Rs. 222, +Rs. 16).

Likewise, hydro sector rose 2.03 points or 0.25 percent, hotel was up 1.14 points and insurance settled unchanged. However, it seems that the shareholders of development bank (-1.94, -0.31%) and others (-10.57, -1.71%) have to wait for another session for a positive note in these sectors.

The uptick in demand of key commercial bank and finance companies led domestic blue chip or sensitive index to close at 141.95 adding 1.25 points or 0.89 percent. 14 commercial banks, 37 finance companies, 15 development bank, 10 insurance companies and one each from hydropower and manufacturing companies are included in sensitive index. Similarly, float Index an indicator of performance of ordinary shares in the market was up 0.29 points to 54.20.

Merely 59 companies registered their presence in the secondary market with 27 gainers and 22 losers. The A-D ratio was maintained at 1.23. All in all 85924 shares traded today via 1077 transactions. Moreover, Rs. 40295008 turnover was realized along with Rs.414856.82 million market capitalizations.

The top five standouts of the day are LBL(8.32%), GFL( 7.77%), MBL( 4.5%), STFL( 4.37%), NHPC(3.95%). Whereas, IDBL(-5.68%), ABBL( -5.43%), MFCL( -3.64%), HBL( -1.92%), DCBL( -1.91%). comprised of the top five losers.

Standard Chartered Bank book closure hits Nepse

REPUBLICA
The market resumed trade this week after a week-long Dashain holiday. The first two days witnessed an uptrend in the market. However, the book closure of Standard Chartered Bank (-Rs 1,734) on October 6 for 50 percent cash dividend and 50 percent bonus shares made a massive impact on Nepse index (-4.15 percent) as the trading volume dropped by 36 percent.
The Commercial Banking sector saw a big fall (-6.69%). Nevertheless, Laxmi Bank (+Rs 69) which is distributing 7 percent bonus shares succeeded in posting one of the highest gains. BiratLaxmi Development Bank (+Rs 71) posted the highest gain of the week while Infrastructure Development Bank (-Rs.59) posted a big decline.
The Hydropower sector´s index (-1.36%) also slipped down as National Hydropower (-Rs 2) and Chilime Hydropower´s (-Rs 8) prices decreased.
Despite the huge fall in the market, the Finance sector (+0.23%) managed to climb up as prices of the shares of NIDC Capital Market (+Rs 100) and Pokhara Finance (+Rs 49) appreciated. Gorkha Finance´s Promoter Shares (-Rs 195) traded at a significant loss.
The insurance sector´s (+0.40%) index went up due to the increments in the share values of Nepal Insurance Company (+Rs21) and Lumbini General Insurance (+Rs 11). The index of ´Others´ went down due to a fallin the value of Nepal Telecom´s (-Rs 10).
Meanwhile, Nepal Rastra Bank is opening bids for 91-day Treasury Bills worth Rs 189 crore, 182-day Treasury Bills worth Rs 30 crore, 364-day Treasury Bills worth Rs 40 crore, 28-day Treasury Bills worth Rs 50 crore, and 91-day Treasury Bills worth Rs 80 crore.
Fewa Finance is auctioning its under-subscribed 13,195 units right shares. Lord Buddha Finance closed its right shares (2:1) on October 8.The market can be expected to witness downward trend with more book closures in offing next week.

NEPSE starts week with gain

Kantipur Report
KATHMANDU, Sept 7 - The Nepal Stock Exchange (NEPSE) started the week on a promising note as it went up by 2.17 points on Sunday. The index settled at 662.57 points when trading closed. The sensitive index lost 0.23 point.
The NEPSE sub-indices saw a mixed reaction as only two of them increased while three witnessed a downfall.
The development bank sector was the highest gainer increasing by 5.14 points followed by the finance sector which went up by 2.73 points. Similarly, the insurance sector was the biggest loser on the floor as it shed 4.12 points followed by the hydropower sector and the banking sector which fell by 1 point and 0.37 point respectively.
Total transactions on NEPSE reached Rs. 117.46 million with 178,992 units of shares being traded. Shares of 69 companies changed hands on Sunday.
Among the 21 commercial banks whose shares were traded on NEPSE on Sunday, Standard Chartered Bank posted the biggest growth with the stock rising 45 points while Laxmi Bank lost the most on the trading floor by shedding 83 points.
Similarly, among the 13 development banks, Sanima Vikash Bank witnessed the highest increase of 15 points while Clean Energy Develop-ment Bank lost 14 points.
Among the 24 finance companies, Merchant Finance Company promoter share was the highest gainer with an increase of 138 points in its share price. Guheyshwori Merchant Bank and Finance was the biggest loser shedding 59 points.
The top five winners on NEPSE were IME Financial Institution with a 6.54 percent rise in its stock price followed by Shikhar Bittiya Sansthan, Nepal Investment Bank, Capital Merchant Banking and Finance and Standard Finance.
Similarly, the top five losers on Sunday were Guhyeshwori Merchant Bank and Finance which fell 9.9 percent followed by Laxmi Bank, Nepal Awas Bikas Beeta Sansthan, Siddhartha Bank and World Merchant Bank.
Nabil Bank topped the chart in terms of turnover with Rs. 26.92 million.

NEPSE makes another downfall

KATHMANDU, Aug 26 - The Nepal Stock Exchange (NEPSE) Tuesday lost 14.47 points on the trading floor. The sensitive index also decreased by 4.8 points.
A majority of the sub-indices on NEPSE saw a decline on Tuesday. The banking sector lost the most by shedding 23.42 points followed by the insurance, finance and development bank sectors which went down by 1.66 points, 1.07 points and 0.58 point respectively.
The share market witnessed a total turnover of Rs. 86.36 million with 123,722 shares being traded. Shares of 55 companies changed hands on NEPSE.
Among the 21 commercial banks listed on NEPSE, Laxmi Bank posted the biggest growth with its stock rising by 6 points while Nabil Bank lost the most on the trading floor by shedding 290 points.
Similarly, among the 10 development banks whose shares were traded on NEPSE, Ace Development Bank witnessed the highest increase of 11 points while Triveni Bikas Bank dropped 14 points.
Among the 15 finance companies on NEPSE, ICFC Bittiya Sansthan was the highest gainer with an increase of 9 points in its share price. NIDC Capital Markets lost 22 points.
The top five winners on NEPSE were Ace Development Bank with a 2.33 percent rise in its stock price followed by ICFC Bittiya Sansthan, DCBL Bank, Butwal Power Company and Chilime Hydropower Company. Similarly, the top five losers on Tuesday were Nepal Investment Bank which fell by 9.92 percent followed by Kumari Bank, Nabil Bank, Global Bank and Nepal Bangladesh Bank.
Butwal Power Company topped the chart in terms of turnover with Rs. 10.18 million. - Kantipur Report