The hotels , insurance companies and hydropower indices have almost doubled in the last six months. A slowdown in the growth of share prices of banks, lack of alternative investment opportunities and increasing institutional demand have been cited for the surge in share prices of these groups.
On March 27, according to the Nepal Stock Exchange (Nepse), the hotels index was recorded at 1,483.06 points, up from 733.08 on Sept 26, 2013. Similarly, the insurance index increased to 2,732.55 from 1,304.61 points and the hydropower index soared to 2,185.07 points from 1,306.76.
Narendra Raj Sijapati, president of the Nepal Stockbrokers’ Association, said the slow growth in bank share prices along with lack of alternative investment areas were the main reasons behind the jump in the stock indices of these three sectors.
According to him, Nepal Rastra Bank’s policy requiring bank promoters to sell 19 percent of their shares has helped increase the supply and push down stock prices.
The increase in the hotels index has been attributed mainly to the announcement of the Soaltee Hotel to provide 40 percent bonus shares to its shareholders.
“The announcement by a big player in the segment could have enticed investors to purchase the shares of other hotels too,” he said.
Similarly, there has been an increase in demand for shares of Oriental and Taragaun hotels . According to Sijapati, the possibility that the Oriental could distribute dividends from next year has attracted investors.
The Oriental has also planned to expand its capacity by next year. “In this context, investors expect to get bonus shares and right shares,” he added.
As per the association, there is equal attraction to buy Taragaun shares in the secondary market.
The Standard Chartered Group has sold its shares in the hotel worth Rs 50 million. “Despite the company’s negative worth, the bulk sale of shares has attracted investors,” Sijapati said.
Apart from hotels , the index of insurance companies has also jumped.
The Insurance Board’s policy requiring both life and non-life insurance companies to increase their paid-up capital and their announcement of attractive returns have helped the index to surge.
Sijapati said besides securing good net profits, most of the insurance companies had provided almost 100 percent returns to their shareholders during the period.
Likewise, the hydropower group made a good mark in the secondary market during the review period.
Among the hydropower companies, Chilime Hydropower provided 30 percent bonus shares and Butwal Power Company announced distributing 18 percent cash dividends and rights shares in the ratio of 3:2. Similarly, Arun Valley Hydropower Development Company also offered 1:1 rights shares to its shareholders.
Anjan Raj Paudel of Thrive Brokerage House said investors considered Chilime’s shares as a long-term investment.
“Prompted by the growth in prices of hydropower stock, demand for newly listed Sanima Mai Hydropower has risen too,” he said.
Paudel added that most development banks and finance companies had also been encouraged to invest in the sector as they had been barred from carrying crossholding shares.
Remaining part | source
On March 27, according to the Nepal Stock Exchange (Nepse), the hotels index was recorded at 1,483.06 points, up from 733.08 on Sept 26, 2013. Similarly, the insurance index increased to 2,732.55 from 1,304.61 points and the hydropower index soared to 2,185.07 points from 1,306.76.
Narendra Raj Sijapati, president of the Nepal Stockbrokers’ Association, said the slow growth in bank share prices along with lack of alternative investment areas were the main reasons behind the jump in the stock indices of these three sectors.
According to him, Nepal Rastra Bank’s policy requiring bank promoters to sell 19 percent of their shares has helped increase the supply and push down stock prices.
The increase in the hotels index has been attributed mainly to the announcement of the Soaltee Hotel to provide 40 percent bonus shares to its shareholders.
“The announcement by a big player in the segment could have enticed investors to purchase the shares of other hotels too,” he said.
Similarly, there has been an increase in demand for shares of Oriental and Taragaun hotels . According to Sijapati, the possibility that the Oriental could distribute dividends from next year has attracted investors.
The Oriental has also planned to expand its capacity by next year. “In this context, investors expect to get bonus shares and right shares,” he added.
As per the association, there is equal attraction to buy Taragaun shares in the secondary market.
The Standard Chartered Group has sold its shares in the hotel worth Rs 50 million. “Despite the company’s negative worth, the bulk sale of shares has attracted investors,” Sijapati said.
Apart from hotels , the index of insurance companies has also jumped.
The Insurance Board’s policy requiring both life and non-life insurance companies to increase their paid-up capital and their announcement of attractive returns have helped the index to surge.
Sijapati said besides securing good net profits, most of the insurance companies had provided almost 100 percent returns to their shareholders during the period.
Likewise, the hydropower group made a good mark in the secondary market during the review period.
Among the hydropower companies, Chilime Hydropower provided 30 percent bonus shares and Butwal Power Company announced distributing 18 percent cash dividends and rights shares in the ratio of 3:2. Similarly, Arun Valley Hydropower Development Company also offered 1:1 rights shares to its shareholders.
Anjan Raj Paudel of Thrive Brokerage House said investors considered Chilime’s shares as a long-term investment.
“Prompted by the growth in prices of hydropower stock, demand for newly listed Sanima Mai Hydropower has risen too,” he said.
Paudel added that most development banks and finance companies had also been encouraged to invest in the sector as they had been barred from carrying crossholding shares.
Remaining part | source
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