KBL, NCCB up, SBL, NBB down!

Rajesh Sharma

KBL and NCCB up and SBL and NBB down. Why such things happen? Is it only due to bonus shares? I am really surprised seeing the behavior of the market. All are not fools who purchased shares of 20 corers of KBL in 2 days and more than 10 corers of NCCB shares in a single day. What could be the reasons, other than bonus shares? Why SBL and NBB are so subdued? All are not wise who are selling SBL and NBB at this throw away price. Hence, this is another interesting part to know.
Perhaps, not fundamental analysis nor technical analysis nor even market sentiment work in Nepali share market. There could be some other interesting factors that we do not know.

I most sincerely invite friends to list those factors that they believe vital to affect market behavior in Nepal.
P. S. Comparison of some useful indicators:
KBL: EPS 18.65 P/E: 28.75, Networth: 163, NPL: 3.19
NCCB: EPS 25.61 P/E: 25.07, Networth: 178.95, NPL: 2.07
SBL: EPS 43.64 P/E: 18.65, Networth: 181.62, NPL: 1.69
NBB: EPS 35 P/E: 20, Networth: 197, NPL: 1.35

Under Developed market: Merger and Bonus/right shares as criteria of a good company!

Rajesh Sharma

My comment on Utsab Shrestha ji's status

Utsab ji,

I had written a post in September 14 and had posted it on Small Investor's Creative Ideas. I have re-posted here once again. Hopefully, that will answer your query at least partly. Moreover, I add here that many among us, we are emotionally immature, temperamentally unstable and educationally (about share market) weak. Hence, our overall reasoning for judgement has a narrow base - merger and bonus/rights share. We are operating in an under developed market and all of us should acknowledge such operational environment. Having said this, I have copied and pasted my text from Small Investor's Creative Ideas.

"Bonus shares
When I read announcement of dividend by a company, in my mind some classification baskets use to appear. If the percentage of bonus share is quite high, thinking that this may affect next year's performance if the company has no good growth prospect or plan, automatically my mind puts that company shares in basket 1. If it is a good mix and sounds not overloading the company for next year, I put it in basket 2. If the the bonus share percentage is too low and the company is too good, I put it in basket 3 and finally if there is no bonus share and there is only cash dividend, I put it in basket 4.

Keys:
Basket 1 = sell soon, in normal time; bonus crazy traders/investors are ready to pay any price right now.
Basket 2 = Hold for 6 months at least, see how things move and decide.
Basket 3 = Hold for long term. Low return but safe and sustainable.
Basket 4 = There is compulsion for now to hold but see opportunity to sell sometime in future.

I may be right or wrong I do not know, but often my mind asks me to do so."

EBL and CHCL

Rajesh Sharma

I have received a few quarries (almost 11 and plus 3 by now), why I feel EBL is a better company to invest now. You know, there is a story.
One Russian Engineer was working in Dhalkebar-Pathlaiya section of the East-West highway. Once, he saw a large bull (a 'holly bull' called Sandhe Goru in Nepali) and imminently saliva started to fill his mouth just by thinking that the beef of that bull, roasted and served to him would be extremely tasty. He shared his opinion to his Nepali friend and asked to find out the owner of that bull and get it from him at any price. His Nepali friend explained and warned him if people knew his intention, he will be beaten severely. The Russian Engineer said, "Oh, No." But, every time when he was seeing the bull, he could not control saliva filling his mouth. The same is true to EBL.
Last time too people were angry from its proposal of dividend. But the price reached to 2700 from around 1700 at the time of dividend declaration that had fallen by about 200 Rs immediately. Please wait and see next time, again its price may go above 4000 during the time of dividend and it will again give us 10% bonus shares. Therefore, this is like that big and healthy bull that every Russian wishes to fill his or her stomach with its roasted beef. But, the bull walks away every time unharmed.
Hence, I feel, this as a buy share for investors now looking at its price.
P. S. I will not write separately. But, CHCL is far better than EBL in giving us dividend. This time around, though its EPS was lower but it gave good dividend. Hence, for friends who have asked me question, I think, CHCL has done justice.

Business Advisory for the week starting from September 14, 2014

This week, we may see the turn around in the market. All regulators have shown concern and have signaled that they will act if some vested interest groups try to create abnormal situation.

The Finance Minister also has shown his concern about the volatility in the market and has said that he will depute an officer to keep eyes over the market.

The worst culprit of the panic this time - the NRB also might have learned a lesson as its headless bureaucrats and "hand-in-glove" type officials cum share market players brought bad name to it in an unprecedented scale, manner and intensity. If Governor Khatiwada himself is a big market manipulator and beneficiary of such manipulation, there could be still harmful policy interference from NRB. Otherwise, the NRB will learn to behave after such severe criticism and loss of face.

The manipulators themselves must have bled a little and such concerted action from their part also will be much less at least immediately. The CDS is very close to come into practice and these manipulators will not dare to venture in such mission before they discover the ways that would help them to exploit.

The big 6 brokers also, may be, have cleared their BTs shares (purchased and hold by themselves in strict sense of ethics "illegal") by now.

The dividend percentages the companies announcing are encouraging except EBL.

All negative factors loosing their strengths and positive factors strengthening, I believe, the market must go up.

Personally, I am in favor of gradual increase of the market - no circuit breaks. These circuit breaks are welcome once in a blue moon,  but they invite unnecessary turmoils in the market. Hence, if there is sustainable growth - gradual, nearly covering all sectors, is what we should be happy with.

Sector-wise, insurance may remain a bit volatile, hydro-power recovering a bit and BFIs including commercial banks, development banks and finance companies may go up. Many MFIs have become a bit glamor companies and may remain volatile like most of the insurgence companies.

May be, some profitable companies to buy for the investors: CHCL, SBL, NBB, EBL etc
For traders: It is better to wait a few days to understand the trend clearly.

OVER ALL: BUY/HOLD.

Buy time continues

Rajesh Sharma

Buy time continues but being very cautious in selecting companies and being moderate in amount of investment.
I have no definite information, but I also believe that  yesterday's fall was due to BT clearance and most probably the BTs (in strict ethical sense illegal purchasing and holding of shares by brokers) of about 6 brokers. It may impact positively for long-term health of the market.

Difficult time: reasonable moves

Rajesh Sharma

I had bought shares of a company a few days ago. My that money evaporated by 18.9% in a week in paper. After the experience of so many years and studying market so closely, it was not desirable to happen. But it happened as the market is highly unpredictable and ruthless. However, I am still confident that my this investment will give me enough return in a year or so. Hence, I have decided to place another buy order tomorrow. For investors, this may actually be a minting time sitting in a Taxar. But, please be cautious as there is considerable risk involved and do not buy aggressively and do not buy by taking loan or at least do not buy taking loan at higher interest rate.

Posted on Nepse discussion form of Facebook on September 08, 2013

Too bad the market is so much down!

Rajesh Sharma

Too bad the market is so much down. The spiral effect of the "1% directive" from the NRB has hurt Nepali share market so badly. I do not know about the motivating factors for the NRB bureaucrats, but certainly they are responsible for this down turn. This is not a normal market correction.
The NRB directive, most probably, brought in collaboration with syndicates and cartels was responsible for creating panic initially among many small investors. Gradually, the panic reached to a level of hysteria that took control over mass market behaviors. And finally, it forced cartels and syndicates out from the seat of influence. I guess, they are also bleeding now.

Now, particularly the small traders are in life threatening situation as share market participants. The only way for such people is to hold shares to keep hope alive, to continue the stay in the market and ultimately to help, in whatever small way, to revert the course of continuous downfall. For the investors, it is buy time, some golden opportunity, if we have the capacity to hold at least for a year or more.

Traders and Investors

Rajesh Sharma

My answer to Anil Dongol ji's querry on my post
Anil dangol ji,
Traders earn by increasing their turnover by buying low and selling high several times in a given period of time. In case of loss in a stock, they balance it buy making profit through another stock. They take risk - moderate or high. For all this, the personality should have attitudinal toughness, sound analytical ability in calculating risk, high level of familiarity with the market behavior, speculative ability in analyzing trends, good information about companies they focus on trading and above all courage to taking decisions and implementing them on time. If someone has such qualities he or she could succeed in trading.

For investors, there is a great need of going into details about the strengths and weaknesses of a company or companies they are interested to invest. Traders, primarily invest in shares of a company, but investors invest in a company. They must have a long term business strategy with contingency plans to cover several "ifs" and "buts". They need patience as they have to stay in a course for a longer period of time. They are calculative risk takers and many among them prefer safety and security for their investment over a fatty return. Therefore, if someone has such traits and attitudinal preferences that person could succeed as investor.
For skills, such as managerial, financial and technical skills, if their size of business is large, both traders and investors could utilize services of fund management companies or that of professional people.
Finally, I agree with Ashok Sitoula ji that an investor has better chance to win.

Let's be realistic

Rajesh Sharma

If some of us are new and we are having loss in paper, let's consider that probable loss as part of payment of tuition fee to "Nepal share market school of experiential learning." It will make us psychologically strong in future. However, if we hold, there is high chance that we recover the loss or even earn profit.
If some of us are traders and we are in loss in paper, let's accept this as normal cyclic effect and let's turn to short term investors and hold.
If some of us are investors and we are in loss in paper, we have plenty of options. The best one is selling less strong companies and buying more strong companies.

My previous experience tells me that we should take risk but in a very calculative manner. Taking loan and buying shares is not advisable option when there is no sign what way the market will move. Buying over optimistically also may be sometimes harmful.
For all, whether we are new, trader or investor; when things are so cloudy, HOLD is the best option. The market, in relative sense, is deep down. But, there are mixed signals. The confidence of small investors has been shaken; big traders also are being seen without any influence and overall, the market is on auto-pilot. Therefore, if we have disposable cash balance in our account or at home, this is best time to buy but being not over optimistic.
This is, in my opinion, best BUY time for small investors but please be calculative and moderate, take quite moderate risk in selecting companies and please buy from your saving only.

WE SHOULD PLAN OUR FUTURE PROSPECTS IN STEPS AND IN GRADUAL PROGRESSION. There is a saying, "ROME WAS NOT BUILT IN ONE DAY".

Nepali share market: some points to think about

Rajesh Sharma

१. अहिले नेपाली शेयर बजारमा अभूतपूर्व उतार–चढावको समय छ । कमाउनेहरु रमाई रहेका होलान, गुमाउनेहरु मलीन मुद्रामा शेयर वजारलाई गाली गर्दै होलान र शेयरका प्रमाणपत्रहरु जतन गरेर राखेर अरु नै धन्दामा तल्लीन भएका वजारमा अनुपस्थित लगानीकर्ताहरु वेखवर आप्mनो दैनिकीमा व्यस्त होलान । संसार धेरै ठूलो छ । सवैलाई आप्mना कथाहरु जम्मा गर्न र सफलता एवं असफलताका अनुभवहरु संकलन गर्ने अवशरहरु उपलव्ध छन् ।
२. वजारमा उर्लिएको नदीले ल्याउने भेल–वाढीदेखी डराउनेहरु वास्तवमा गुमाउनेको लहरमा उभिन पुग्छन् । यो वजार एउटा ठूलो समुद्र जस्तै हो, जहाँ ठूला माछाहरु साना माछालाई खाएरै मोटाउछन् । साना र कमजोर लगानीकर्ताहरुसंग प्रतिस्पर्धाका लागी ज्ञान, शीप र खतराको सामाना गर्ने शाहस हुनु जरुरी छ । ती गुणहरु आफुमा छैनन् भने धेरै गुमाउनुभन्दा अगाडी नै वजारवाट वाहिरिनु राम्रो हुन्छ ।
३. मैले धेरै साथीहरुले वजार माग र आपूर्तीवाट संचालन हुने प्रतिस्पर्धी व्यवस्था भएको ठाउँ हो भन्ने लेखेको कुरा पढेको छु र वोलेको कुरा सुनेको छु । यो आमरुपमा सही पनि हो र विशिष्ट अवस्थामा गलत पनि । जव आकाश खस्न लागेको प्रतीत हुन्छ, संगै रहेको साथीपनि देखिदैन । यो अवस्थामा वजार न प्रतिस्पर्धी रहन्छ, न खुला । हाम्रो जस्तो पुरातन प्रणालीमा संचालनमा रहेको यो वजारमा यस्तो हुनु स्वभाविक पनि हो ।
४. प्रश्न उठ्छ किन राष्टृ वैकले गएको मौद्रिक नीतिसंगै त्यो प्रतिशतवाला प्रवधानको व्यवस्था गरेन? किन उस्ले शुरुमै ३० प्रतिशत जस्ताको तस्तै राखेर त्यसभित्रको १ प्रतिशतको कुरा स्पष्टताका साथ वताएन? किन अरु नियामक निकायहरु शुरुको वजार घटेका दिनहरुमा सकृय देखिएनन? किन राष्टृ वैकको स्पष्टिकरण आयो जव वजारमा धेरै ठूलो संख्यामा शेयरहरुले मालिक परिवर्तन गरि सकेका थिए र नयाँ मालिकहरु वेच–विखनको तयारीमा लाग्न शुरु गरेका थिए? यी सवै कुराहरुले हाम्रो वजार पूर्ण प्रतिस्पर्धा एवं खुला वातावरणमा संचालित छ भन्ने कुरामा संदेह उत्पन्न गराउँछन् । अझ थप कुरा के छ भने यत्रो लामो होहल्ला र तम्तयारीपछि पनि सिडियस किन लागु हुँदैन? किन त्यसका लागि प्रकृयागत कुरामा अल्झाएर राखिएको छ? यस्ले अर्थ मंत्रालय समेतका नियामक निकायहरुका अधिकारीहरुमाथि संदेहका आखाँले हेर्नु परेन र?
५. अहिले धेरै कम्पनीहरुको मूल्य घटेको छ । ती कम्पनीहरुमध्ये धेरै यस्ता कम्पनीहरु छन् जस्को मूल्य घटता आश्चर्य लाग्छ । कम्पनीका आधारभूत सुचकांकहरु सकारात्मक मात्र होइन, उत्साजनक छन्, उनीहरुको नाफा, प्रति शेयर कमाई, जगेडा कोष आदी सवै आकषर््ाक छन् तर मूल्य घटेको छ । देशमा राजनीतिक वातावरणमा तात्वीक अन्तर आएको छैन, आर्थिक रचना डावाडोल भएको छैन र वाह्य आक्रमण वा घनीभूत हस्तक्षेपको अवस्था पनि छैन । यस्तो अवस्थामा तेस्ता कम्पनीहरुका शेयरधनीहरुले किन आप्mनो लगानीको अवस्था नकारात्मक भएको देख्नु परेको हा?
६. यसैले, मेरो आप्mनो निष्कर्श के छ भने हामीसंग यी माथिका व्यवधानले उत्पन्न गर्ने चक्रव्यूहसंग जोगिन सक्ने शीप, कौशल र आँट छ भने हामी यो वजारमा लगातार दृढतापूर्वक डटी रहौ – हाम्रो राम्रो भविष्य छ । त्यस्ता गुण हामीसंग छैनन भने हामी स्वेच्छाले कम नोक्सानीमा वजारवाट वाहिर निस्कौं अथवा त्यति वेलासम्म पर्खौ जहिलेसम्म हामी नाङ्गै निस्कनु पर्ने अवस्थामा पुग्दैनौ । यो सुन्दा तितो लाग्छ, तर वजार निर्मम हुन्छ र अन्तरतत्वमा, यहाँ सवैलाई समान अवशर उपलव्ध छैन । यसैले, वजारमा पसेर निस्कने आँट गर्नु पनि दीर्घकालको हिसावले फलदायी हुनसक्छ ।
यो लामो वक्तव्यवाजी प्रति म आफैपनि दुखी छु तर स्वभावको आम नियन्त्रणमा रहनु पर्ने धर्मपालना गर्ने क्रममा मैले यस्तो कुरा लेख्नु नै प¥यो । संस्कृतमा एउटा श्लोक छ – वादे, वादे जायते तत्ववोध । वाद–विवादले नै ज्ञानको गहिराईसम्म पुगिन्छ । साथीहरुका विचारहरु आउने नै छन् ।
This is my first major attempt to write in Nepali. So, mistakes in typing are many. I thank you most sincerely Nytsal Shrestha ji for your suggestion to use unicode nepali. ( http://www.ashesh.com.np/nepali-unicode.php
http://www.typenepali.com/)