Nepse thunderbolt falls on 11 firms

KATHMANDU: Nepal Stock Exchange (Nepse) has suspended the trading of 11 companies — including two development banks, three finance companies and one insurance company — as they failed to pay the annual fee for this fiscal year on time.

It has frozen the trading of Salt Trading Corporation (STC), Arun Vansapati Udhyog (AVU), Nepal Bitumen and Barrel Udhyog (NBBU), Raghupati Jute Mills Ltd (RJM), Shree Bhrikuti Pulp and Paper Ltd (SBPP), Paschimanchal Bikash Bank (PDBL), Bageshwori Development Bank (BDLN), Royal Merchant Banking and Finance (RMBFI), Nepal Finance and Savings Co Ltd (NFS), Yeti Finance Company Ltd (YFL) and United Insurance Co (Nepal) Ltd (UIC).

Some of the companies — mostly industries like Raghupati Jute Mills and Arun Vansapati Udhyog — are on the verge of collapse and have downed their shutters. They have not seen their shares traded for a long time also.

The low contribution of the manufacturing sub-group to the total trading has made the secondary market more vulnerable as the whole market is under the concentration risk of banks and financial institutions.

According to the Stock Exchange Regulation 2002 second amendment, Nepse can suspend the trading and listing of companies. “Failure to pay renewal fee will lead to suspension of the trading,” according to the provision. The companies should pay the annual fee within the first three month of new fiscal year, that ended on October 17. Once the annual fee is paid, the transaction of suspended companies will resume.

Meanwhile, the book-closure of Everest Bank Ltd (EBL) pulled Nepse down by 8.34 points leading it to close at 601.21 points. The first day of the week saw all major sub-groups perform badly. Nepse is dominated by the banking sub-index and the fall in the prices of commercial banks like Standard Chartered Bank Nepal, Nabil Bank and Everest Bank — blue-chip shares — pulls Nepse down.

The banking sub-group — a key market propeller — lost 9.3 points to drop to 586.33 points as the total market capitalisation came down to Rs 423,768.45 million. However, the floated market capitalisation stands at Rs 110,172.31 million today.

ADBL primary issue soon

KATHMANDU: Agriculture Development Bank Ltd (ADBL) is floating the largest-ever primary issue in the history of Nepal’s capital market by the end November half. The bank has appointed Ace Development Bank as its issue manager for its mega initial public offering (IPO). ADBL and Ace had entered into

an agreement on April 21 to issue 96,00,000-unit shares worth Rs 960

million. — HNS