KATHMANDU: Cash dividends of Unilever Nepal Ltd could not spread cheer in the domestic market as the banking sub-group dragged Nepse down by 27.42 points today to 630.11 points.

The banking sub-group lost 47.2 points to drop to 626.31 points due to major banks, especially Nabil Bank, losing heavily. Due to books closure Nabil’s shares dropped by Rs 1,599 per unit or over 38 per cent, forcing Nepse to suspend its transaction.

Nabil’s 340-unit shares traded between Rs 2,652 and Rs 2,600. Yesterday, they closed at Rs 4,251 per unit.

“This is a market price correction to reflect the dividend and bonus shares that Nabil has proposed following the delivery of an unprecedented profit of Rs 1.03 billion in the last fiscal year,” said Anil Shah, chief executive officer of Nabil Bank. Every investor, who owned shares of Nabil till that

closing will receive 50 per cent bonus shares (one share for every two) and

a cash dividend of 35 per cent

(Rs 35 per share). “When the market opened this morning, it was

known that those who purchased shares from today forward would not receive the bonus shares or cash dividend,” he said adding that therefore the market to a large extent adjusted the price of the shares.

He also promised to continue to deliver unprecedented shareholder value in the years ahead in order to protect blue chip investment in Nepse.

Currently, banks and financial instituions dominate the secondary market and two institutions — Standard Chartered bank Nepal and Nabil Bank — with the highest share prices are playing a determining role in the movement of Nepse. “However, with the increase in the number of listed financial institutions and the depth of trading in the market this ‘concentration’ risk will diminish over time,” Shah hoped.

Meanwhile, Unilever Nepal Ltd’s 96th Board of Directors (BoD) meeting recommended Rs 450 cash dividend — Rs 400 normal dividend

and Rs 50 as commemorative dividend on the occasion of completion of its 15 years of commercial production in Nepal — from the profit of the last fiscal year. The company had a turnover of Rs 2625.8 million in 2008-09. It has posted Rs 444 million net profit (after deducting tax).

Unilever’s BoD meeting at the company head office in Mumbai yesterday approved the audited annual accounts of the company for the fiscal year 2008-09. It also approved distibution of Rs 325 as Interim Dividend per share out of the cash dividend of Rs 450 per share post certification of the audited annual accounts for the fiscal year by statutory auditors.