NEPSE UPDATE Nabil Invest UPDATE Bullion Desk UPDATE

W e a l th
Monthly Newsletter from Nabil Investment Banking Ltd. (Nabil Invest) Vol.5. Issue 04, Shrawan, 2073
NEPSE UPDATE
INDICATORS
NEPSE
As at
Shrawan
24, 2073
Upcoming AGMs
Ashadh
End, 073
Jestha
End, 073
(+/-) % from
Jestha End till
Shrawan 24
1,675.91
1,718.15
1,614.15
3.83
SENSITIVE
360.74
369.07
349.19
3.31
BANKING
1,567.61
1,573.71
1,474.49
6.32
DEV. BANKS
1,767.88
1,772.75
1,608.52
9.91
835.53
837.82
739.64
12.96
INSURANCE COs
7,962.78
8,722.40
8,748.31
-8.98
HYDROPOWER
2,477.09
2,690.18
2,505.20
-1.12
FINANCE COs
HOTELS
2,083.68
2,030.71
2,021.24
3.09
MANU. & PRO.
2,482.48
2,581.52
2,355.65
5.38
OTHERS
796.49
848.26
781.26
1.95
TRADING
202.79
202.79
201.38
0.70
60,937.07
62,033.22
49,263.55
23.70
VOLUME (000)
NEPSE index witnessed a major decline after maintaining its all time high record
th
breaking streak until 27 July when it was at 1881.45 and dropped to 1675.91 a
drop of 10.92% (205 points) in just 12 days. As per our analysis, the off late
downtrend seen in the market is majorly due to various adverse information
being floated in the media about the capital market which has resulted in panic
selling by retail investors. The upbeat of the market today and our understanding
of the market shows that positive elements for future growth remains
unchanged such as impressive profit growth of most listed companies, declared
right share opportunity and stock dividend in foreseeable future, decreased
stock broker commission, stocks being more liquid, better than expected
smoothness of transition of government etc. There obviously remains challenges
as well; such as possibility of large scale profit booking by investors, average
macroeconomic indicators etc. Nabil Invest’s assessment of current scenario is
positive in the medium to long run. Having said that, volatility may be seen in the
short term due reasons stipulated above.
The detailed information about upcoming AGMs is enclosed in Annexure.
Nabil Invest UPDATE
•
•
•
Bullion Desk UPDATE
Market UPDATE
•
SEBON slashes brokerage fee by up to 60pc
NRs. 50,285/10 Gms.
Silver
NRs. 763/10 Gms.
As of August 14, 2016
– Seth Klarman
SEBON has reduced brokerage fees on share…………….Read More
•
Worked Gold
"Stock market is a story of cycles and of
human behavior that is responsible for
overreaction on both directions."
Free-pricing method for IPO in the offing
The government is paving the way for public………….…Read More
•
Hallmark Gold NRs. 50,500/10 Gms.
Quote of the Month
NRB may relax MFI spread rate provision
After Microfinance institutions (MFIs) complained ……Read More
•
Nabil Invest as an Issue Manager for 4:1 ratio right
share of United Finance Ltd. has opened the issue
from 14th July 2016 to 17th August 2016.
Nabil Invest is also one of the appointed collection
center for 4:1 ratio right share of Surya Life
Insurance Co. Ltd. which is going to open the issue
from 4th August 2016 to 7th September 2016.
Nabil Invest has been appointed as the Issue
Manager for 1:1 ratio right share of Deprosc
Development Bank Ltd. amounting to NPR 250
million.
Dumping merger plans may invite punishment
NRB is mulling penalizing banks………………………Read More
Our Services:
Issue Management |Underwriting |Registrar to Share/Depository Participant| Portfolio Management| Corporate Advisory | Fund Manager and
Depository for Nabil Mutual Fund
NEPSE – Technical Analysis
Trend Analysis
Up until 27th July, the benchmark index of the only stock exchange of the country- NEPSE remained in an
upward trend and recorded its all time high closing at 1881.45 points. However, it closed at 1675.91
points at the end of the review period of Shrawan 2073 (i.e. August 8, 2016). NEPSE recorded the
highest turnover of NPR 2.75 arba till date on 26th July, 2016 which can be attributed to the increased
trading time by one hour and reduction in brokerage commission by up to 60%.
The NEPSE index dropped a few points after the monetary policy which addressed on tightening the
margin lending and reduced the interest spread rate to 7.00% for Microfinance companies. But NEPSE
recovered in short span and continued its upward trend after the investors switched to banking sector
as most of the BFI’s are publishing sound 4th Quarterly report of FY 2072/73. The recently resumed
trading of commercial banks like Siddhartha Bank Ltd, Machhapuchhre Bank Ltd. and Janata Bank Nepal
Limited, which were in halt since long time helped to surge the banking index. However, after reaching
the high of 1881.45 points on July 27, 2016, NEPSE started to drop off to 1675.91 points at the end the
review period majorly due to various adverse information being floated in the media about the capital
market such as SEBON deciding to form a committee to investigate illegitimate flow of fund in the
market, change of government etc which resulted in panic among investors due to continuous fall in the
past week.
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
8-Aug-15
8-Oct-15
8-Dec-15
8-Feb-16
8-Apr-16
8-Jun-16
8-Aug-16
Relative Strength Index (RSI) Analysis
The 14-days RSI surged up to 84.49 on 27th July, 2016 and dropped down to 35.35 at the end of the
review period (8th August, 2016) in the oversold zone indicating that the selling pressure is high in the
market and the stock prices are likely to be undervalued which means time for investors to be buying.
Though RSI is a very effective and widely used leading indicator, in the trending market, it is not
appropriate to take decision solely based on RSI. RSI only reflects the momentum of the market. One
should be aware that large surge and drop in the price of an asset will affect the RSI by creating false buy
or sell signals. To reflect better position, RSI is generally confirmed with Moving Averages and Moving
Average Convergence Divergence (MACD).
90.00
70.00
50.00
30.00
10.00
Moving Average Convergence Divergence (MACD)
As shown in the chart below, MACD decreased from 95.52 on 31st July, 2016 to 46.60 on 8th August,
2016. MACD line crossed the trigger line from above when NPESE index was at 1768.60 points on 4th
August, 2016 indicating downward trend.
The decreasing MACD with some fluctuation in the recent period suggests that the downward trend is
getting stronger. Thus, there are chances of correction due to reasons mentioned above as well as profit
booking at higher prices by the experienced investors, which might result into panic selling by the new
investors.
120
100
80
60
40
20
0
-20
-40
-60
-80
8/8/2015
MACD
10/8/2015
12/8/2015
2/8/2016
Triggerline
4/8/2016
6/8/2016
8/8/2016
Moving Average Analysis
Moving Averages lines are used to identify current trends and trend reversals as well as to set up
support and resistance levels. Further, moving averages can be used to quickly identify whether security
is moving in an uptrend or a downtrend depending on the direction of the moving average.
20 days MA and 50 days MA Analysis:
From the moving average chart below, it is apparent that 20 days MA line crossed 50 days MA line from
below on 23rd December, 2015 when index was at 1,137.03 points indicating bullish signal. Since then,
the 20 days MA line remained above 50 days MA line. Thus, it indicated that the market will follow an
upward trend with some corrections in the market, which was apparently visible when NEPSE Index line
crossed the 20 Days MA from above on 4th August, 2016 when NEPSE was at 1768.6 points, and also
crossed the 50 Days MA from above on 8th August 2016 when NEPSE was at 1675.941 points. At the end
of the review period, both 20 Days MA and 50 Days MA line lies above the NEPSE Index line indicating
the downward trend.
2,100.00
1,900.00
1,700.00
1,500.00
1,300.00
1,100.00
900.00
700.00
NEPSE Index
50 Days MA
20 Day MA
50 Days MA and 200 days MA Analysis:
If we look at the longer period moving averages, 50 days MA line crossed the 200 days MA line from
below on July 26, 2015 and remained above the 200 days MA line till the end of the review period. This
indicated a bullish trend in the long run. However, recently if we look at the 50 days MA line and the
NEPSE index, NEPSE index line crossed 50 days MA line from above on 8th August, 2016 when NEPSE was
at 1675.91 points and has remained below the 50 days MA line till the end of the review period, which
indicated downward trend as a result of some natural corrections seen in the market. The touching
point between the 50 days MA and NEPSE lines can act as a support level.
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
900
800
NEPSE Index
50 Days MA
200 days MA
NABIL Mutual Fund
NAV Summary of Nabil Balanced Fund I as on Ashadh End 2073
Investment
Amount (NPR)
Amount (NPR)2
Listed Securities
1,804,175,392.00
Shares
1,689,745,112.00
Debentures
114,430,280.00
Unlisted Securities
124,928,193.00
Shares
124,928,193.00
Bond/Debentures
Fixed Deposits
75,000,000.00
75,000,000.00
Total Investment
2,004,103,585.00
Current Assets
Bank Balance
191,943,294.16
Other Assets
11,901,459.61
Total
203,844,753.77
Current Liabilities
Other Liabilities
Accumulated Fees & Commission
Total
Gross Assets Value
Fund Managers Fees
Depository's Fees
Supervisors Fees
Net Assets Value (NAV)
No. of Units
NAV per Unit
6,218,998.24
27,146,594.40
33,365,592.64
2,174,582,746.13
3,693,811.79
923,452.95
923,452.95
2,169,042,028.44
75,000,000
28.92
Monthly NAV Trend of Nabil Balanced Fund –I
NBF-1 NAV
31
26
NPR
21
16
11
15.28
16.74
18.57 18.71
15.31 15.16 14.62 15.07 15.68 16.26 16.08 15.69 15.52 15.25 15.87
6
Months
18.26 17.54
16.82 16.21 16.54
18.65 19.75
20.7 21.36
22.83
25.87
28.92
ANNEXURE
UPCOMING events
Company's Name
Country Development Bank Limited
Book Close AGM Date
Date
7-Jun-16 13-Aug-16
Stock
Dividend (%)
7.25
Cash
Dividend (%)
0.38
Civil Bank Limited*
26-Jan-16
26-Aug-16
-
-
International Leasing & Finance Company Limited
11-Aug-16
26-Aug-16
-
-
*Special Annual General Meeting
Disclaimer and important information: This document has been prepared by Nabil Investment Banking Ltd. (Nabil Invest) for information and
illustration purpose only. The information provided in this document is subject to change. While this information has been obtained from sources
believed to be reliable, Nabil Invest is not liable for erroneous information obtained from the sources. Nabil Invest, its directors and employees are not
liable/responsible for any direct, indirect or consequential loss arising from use of this document or its contents. Past performance is no indication of
future results. Nabil Invest is regulated by Securities Board of Nepal. This document may not be reproduced, distributed or published by any person for
any purpose without Nabil Invests’ prior written consent.
rd
Nabil Investment Banking Ltd., 3 Floor, Central Plaza, Narayanchaur, Naxal, Kathmandu
Phone: 01-4411604, 4411733 | Fax: 01-4410554 | [email protected] |http://www.nabilinvest.com.np/ |
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