Use of facebook

Rajesh Sharma

My comment on Ramesh Poudel ji's post on using facebook.

It is difficult to define the term 'productive'. An unproductive act for one person could be very productive for another person. Hence, generalization makes the term ambiguous. If you ask me, gathering information, filtering and processing them and utilizing those information while making decisions is also a productive activity and social networking sites such as facebook are useful sources of information and good platform for debate, dialogue and sharing. However, I agree with Ramesh Poudel ji it will not add value if we have problems in setting objectives for use of such platform. The objectives could be simply building relationships/friendships or networking for businesses or making and strengthening access to power.

Market astrologers, Company vulnarability

Rajesh Sharma

I like to share 2 points.

1. Now, we could see several share market astrologers, who are busy predicting the NEPSE index for immediate future. They do not provide any supporting facts, data, credible logic or technical analysis. Simply they say the index will go down or up to xx figures such as 650, 700, 900, 950 etc. These predictions are simply their wishful thinking. Let's leave them happy and throw such predictions not supported by any technical analysis, into a dustbin.

2. In Nepali share market, we simply focus on operational factors including company's tangible performance. However, most of the time, looking at intangibles offers useful insights. Among such intangible factors, one is vulnerability assessment. The companies are many, particularly in banking sector that includes commercial banks, development banks, finance companies and micro finance companies. Many among them are either run by business houses or retire business/banking professionals/elites. We have only few public limited companies of real meaning of the phrase. We have good business houses and notorious business houses running the show. Similarly, we have companies that have no spinal chord, and if there is any, that is diseased.
For next year, if the situation does not change dramatically, we may see a good number of companies in red zone. The excessive or unsustainable bonus share or rights shares may increase their obligations and they may fail to meet share holders expectations. For this reason, we should see the vulnerability factors of any company before making investment for long time. Seeing anarchic environment in Nepal, this is absolutely necessary for the long term investors. Gone are the days when courage, luck and gut feelings were enough to make investment decisions.

Subdued NEPSE and BT

Rajesh Sharma

May be, I am a bit off the track of facts, I don't know. But, I still strongly believe that the decrease in NEPSE is primarily due to BT. Till the big traders including such brokers will clean their store, the market would be in subdued state. They may even push further the implementation of CDS by another 3 months if they need to do that. We are living in an anarchic environment and such thing could happen quite often. Hence, we have to plan accordingly.

Bonus/Rights shares

Rajesh Sharma

Slowly, there is increasing awareness about the impact of bonus share/right shares. Traders still think that the higher the better. But, slowly the investors have started to see the impact for next year. Hence, there is growing realization that the higher percentage of bonus/right shares without any solid growth plan/environment may play highly negatively over the performance of the company.

CHCL's right share and Sabidhan and Market

Rajesh Sharma

My comment on Gautamraj Rai ji's post about Chilime's rights share and further discussions on it.
I have two points to share.
1. CHCL rights share: I am not so hopeful. However, CHCL could stand on its firm footing without making additional attractions like rights shares. Hence, neither I believe that all of the sudden it will jump up or fall down. My expectation is that it would move up gradually from this price level.

2. Sambidhan and market: The effects is there when the result is not out. Hence, we may have still some turmoil but that would be before Magh 8. Those who could not take further risk will sell when there is enough time for them to sell. Those who will retain fully being aware that there may not be constitution they will hold even after Magh 8. The institutional investors will hold large part of their holding anyway as that would be only a better option for them. A few undecided ones may not create that much impact. Immunity and resistance will keep market continuing rather than falling down. Only, getting bankrupt macro economic factors and heavily deteriorated company's performance could bring disaster in the market other than the situation of war. That is not the case at all.
Hence, my understanding is that we have two more difficult months remaining due to uncertainties of the political course and anticipation of CDS implementation. By Magh 8, such uncertainties would be cleared positively or negatively or the status quo would continue. Therefore, the market will go on as usual - some high or some low, even if there would not be a constitution by Magh 8.

NEPSE Index in the last six months

Rajesh Sharma

NEPSE Index

Six month
2014.5.4 830.71
2014. 11.3 904.03
Change: 73.32

Highest
2014. 7. 21 1083.55

Yes, the index has come down quite heavily; however, it is not that bad as it has been perceived. In six months, the index has moved up by 8.83%.

Moreover, it has absorbed the effect of bonus share of many companies. which had book closure.

Chilime's falling share price

Rajesh Sharma

My comment on Haku Cha ji's post about CHCL's price fall
All major hydro-power companies are in growth mode. These companies are not banks and they have two models - individual company or conglomerate. Chilime, BPCL, AHPC etc are following the second model. Many other companies also may move to this model when they grow or enter into smaller projects too. These companies need time to perform hence are for long-term investment.
CHLC, BPCL or AHPC all three companies have come down in share price. The factors could be many and different. For CHCL, Ghising factor added to its speed in climb down. Our market is too sensitive even to not so important factors.

Hence, CHCL, BPCL and AHPC are going through a lean phase due to peripheral factors and their fundamentals are still sound. When the market would start moving up, these companies could be in first line to book the ticket to climb up.
Note: This is my opinion and you please analyze yourself.