AAKASH CAPITAL LIMITED Weekly Newsletter from Aakash Capital Limited for the week ending on 26 th April, 2019 NEPSE UPDATE Indicators 21 st April, 2019 25 th April, 2019 (+)/(-) % NEPSE 1,264.20 1292.12 2.21% SENSITIVE 273.41 279.67 2.29% FLOAT 93.38 95.44 2.21% BANKING 1,167.63 1197.69 2.57% HOTELS 1,818.80 1858.07 2.16% DEVELOPMENT BANKS 1,525.62 1584.97 3.89% HYDROPOWER 1,141.60 1130.18 -1.00% FINANCE 626.7 631.46 0.76% NON LIFE INSURANCE 5,461.67 5631.47 3.11% MANU. & PRO. 1,984.78 2075.04 4.55% OTHERS 713.97 717.03 0.43% MICROFINANCE 1,498.29 1488.75 -0.64% LIFE INSURANCE 6,095.89 6329.34 3.83% Market Summary Statistics (21 st April to 25 th April) Total Turnover (Rs) 5,005,859,973.00 Total Traded Shares 16,366,581.00 Total Number of Transactions 51,008.00 Scrips Traded 176.00 Market Cap at Week start 1,563,546.42 Millions Market cap at Week end 1,601,054.22 Millions Floated Market Cap at Week start 552,642.37 Millions Floated Market Cap at Week end 565,202.25 Millions Bullion Update As on 26 th April, 2019 Hallmark Gold Rs.59,800/tola Worked Gold Rs.59,500/tola Silver Rs.730/tola Quote for the week “Its’s far better to buy a wonderful company at a fair price than a fair company at wonderful price.” -Warren Buffet The market jumped 2.21% or 27.92 points in the trading week between April 21 and April 25. Along with Nepse index, the sensitive index which measures the performance of blue chip companies also inclined 2.29% or 6.26 points. Similarly, float index also went up 2.21% or 2.06 points. The market index continued its growth this week too. The secondary market had opened at 1232.53 points on Sunday and went down by 31.67 points to end the day at 1264.20. On Monday, the index shed 7.26 points as it declined to 1256.94. However, on Tuesday, the market index increased by modest 3.74 points but turnover decreased to 614.14 million from 1046.03 million. The index increased by 18.61 points supported by a good turnover of Rs 950.3 million on Wednesday. The index added 12.83 points, while the turnover grew to Rs 1357.55 million at the end of trading week to close at 1292.12. In the review period, all the sub-indices except for hydropower and microfinance posted gains. The manufacturing and processing experienced highest gain with 4.55%. The development banks experienced second highest gain with 3.89% or 59.35 points. The life insurance and non-life insurance which fluctuates most augmented by 3.83% and 3.11% respectively. The commercial bank, the heavyweight sub-index, escalated 2.29% or 6.26 points. It was followed by hotels that went up 2.16% or 39.27 points. Hydropower and Micro Finance, on the other hand, lost 1% and 0.64% respectively. As was the case in previous trading week, the market witnessed an enthusiastic trading volume. The total turnover during the review period stood at Rs 3.97 billion. Daily turnover averaged Rs. 992.23 million. The total market value increased by Rs 37507.8 million as the market capitalization increased by 2.4% during the trading week. The old investors seem to have increased their investment volume while new investors have entered the market as shown by an increasing turnover amount.
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AAKASH CAPITAL LIMITED
Weekly Newsletter from Aakash Capital Limited for the week ending on 26th April, 2019
million as the market capitalization increased by 2.4%
during the trading week. The old investors seem to
have increased their investment volume while new
investors have entered the market as shown by an
increasing turnover amount.
.
News Update
NRA needs additional 429 billion
The National Reconstruction Authority (NRA) has said that it needs an additional Rs 429 billion to complete reconstruction of
structures devastated by the earthquakes of April and May in 2015. It had been estimated that a total of Rs 938 billion would
be required for the five- year reconstruction plan. Of this amount, Rs 186 billion was spent by fiscal year 2017-18, and the
revised projected expenditure for the fiscal year is Rs 123 billion…Read More
Ncell lodges petition at Supreme Court
A day before the expiry of the seven-day deadline to pay its capital gains tax, Ncell, a private telecom giant, on Monday lodged
a petition at the Supreme Court, saying the Large Taxpayers Office has wrongly determined their tax liability at Rs39.06
billion…Read More
Investment Summit’s progress report card
Nijgadh Airport has received the highest number of applications from prospective investors after being showcased at the Nepal
Investment Forum last month. The $3.45 billion mega airport project in Nijgadh, Bara, which is also a national pride project, is
among the most expensive projects the government has been trying to get foreign investment for… Read More
Private sector urges government to regulate imports through budget
The private sector has urged the government to impose both quantitative and qualitative restrictions on imports through the
upcoming budget for 2019- 2020 fiscal year. Citing that Nepal is the only country which allows haphazard import of goods,
private sector representatives said that the government should regulate import and allow the inflow of only qualitative and
quantitative goods in the domestic market… Read More
Market Announcements
3,35,000 units IPO shares of Ganapati Microfinance Limited to the general public is closing from 12th Baishak, 2076.
35,34,340 units IPO shares of Union Hydropower Company Limited to the general public is closing from 12th Baishak ,
2076.
Nepal Investment Bank Limited is distributing 18% bonus share directly to DEMAT accounts and urged its shareholders to
dematerialize their shares.
Agricultural Development Bank Limited is distributing 15.053% cash dividend directly to bank accounts and has urged its
shareholders to dematerialize their shares.
Shangrila Development Bank Limited is distributing 4% bonus share directly to DEMAT accounts and has urged its
shareholders to dematerialize their shares
Siddhartha Bank Limited is distributing (11% SBL Debenture 2075) principal and interest payment to the debenture holders
from 12th Baishakh, 2076.
Nepal Insurance Company Limited has allotted its 1:0.65 ratio 38,67,288.50 units right share to its shareholders on 10th
Baishakh, 2076 and refunding money to non-allottee investors from Baishakh 15, 2076.
Grameen Bikas Laghubitta Bittiya Limited has alloted its 1:0.5 ratio 32,75,000 units right share to its shareholders from 27
Baishak, 2076 to 30 Jestha, 2076.
Aarambha Microfinance Bittiya Sanstha Limited has announced its Special General Meeting going to be held on 26th
Baishak, 2076.
Lumbini General Insurance Limited has announced its Special General Meeting going to be held on 25th Baishakh, 2076. Chhimek Laghubitta Bikas Bank Limited has announced its 17th AGM going to be held on 30th Baishak, 2076. National Hydro Power Company Limited has announced its 22nd AGM going to be held on 27th Baishakh, 2076.
Loans and advances ('000) 82,594,050.67 56,241,791 67,753,770 20.47%
Net profit ('000) 1,052,204.00 587,558 792,754 34.00%
Return on equity 14.26 11.46 12.93 12.83%
Return on asset 1.85 1.55 1.75 12.90%
Earnings per share 24.58 14.41 19.45 34.98%
Net worth per share 167.84 125.77 150.37 19.56%
P/E ratio 12.84 18.25 11.06 -39.40%
The bank has completed eleventh years of operation. The growth of the bank has been monumental as discussed in the
above section. Now, looking at quarter to quarter growth in various variables, this also reinforces the healthy growth of
business. Reserve and surplus, deposits, loans and advances and net profit has increased significantly all with more than 20
per cent. Reserves and Surplus has increased by 95.48 per cent, almost by double as compared to the corresponding quarter
of the previous year. Most importantly, net profit has soared by 34 per cent which is indication of overall good performances
of its activities. However, these particulars are still below industry average but it seems it will achieve these industry averages
in near future looking at their growth rate.
The bank has less paid-up capital than industry averages with 8.15 billion as a paid up capital but we can see there is no any
incremental change. The deposit base as well as the loans and advance has increased satisfactorily compared to the
corresponding quarter of previous year. In fact, growth in loans and growth in deposit has increased in equal proportionate.
This has been same with the case of return on equity and return on assets. Followed by this, earning per share and net worth
per share has also increased.
Dividend History
Dividend 2013/14 2014/15 2015/16 2016/17 2017/18
Dividend Per Share 11 22.63 33.33 15 11.5
Bonus % 11 21.5 33.33 15 -
Cash % - 1.13 - - 11.5
It can be seen from the table that the bank has been distributing dividend to its shareholders regularly. This year, the bank
has proposed cash dividend for the first time during last 5 years at 11.5% amounting to NPR 937 million. The bank has been
distributing “stock” dividend continuously since last three years to support enhancement in requisite capital. It has met the
requisite capital of NPR 8 billion in 2017/18. Since growth in banking business has to be supported by proportionate increase
in its capital, it may consider distinctive dividend policy in the coming years.
Technical Analysis of SRBL as on 25th April, 2019
Day Candle
Open 267
High 276
Low 261
Close 272
Pattern Analysis
Chart Pattern Short term Uptrend
Resistance R1: 281 R2: 310
Support S1: 214 S2: 204
Higher Breakout Level 300
Particulars Points Remarks
Volume 79,374 The daily volume and weekly volume of the stock
is higher than that of the 1 month. Avg. Volume (1 week) 42,326.40
Avg. Volume (1 month) 37,629.43
No. of Transaction 233 The daily number of transactions is higher than that of average transaction of the week and month.
Avg. no. of Transaction (1 week) 126
Avg. no. of Transaction (1 month) 95.29
180 days Average 225.82 The price of the stock is trading above both 180 days and 360 days average. 360 days Average 237.71
52 Weeks High Price 276 The stock is currently trading closer to 52 weeks high price. 52 Weeks Low Price 203
Nepse Index 1 year Change -6.81% The overall market in the least 12 months is in a downtrend and so is the industry. However, the stock has gained in the past one year and even more so in the 1 month’s period.
Industry Index 1year Change -0.03%
Stock 1-Month Change 25.35%
Stock 1-Year Change 6.25%
Monthly Beta 1.705 The monthly and quarterly beta of the stock is higher than the market. Quarterly Beta 1.376
Total Holdings of Mutual Funds (Falgun) 76,939,650 The Mutual Funds are holding good number of
shares of the company.
Stock Holdings of Top Broker (from Dec, 2018) 201,105 The sum of Stock holdings of 5 Brokers is shown with the average of their average buying and selling price. The holding period is taken after the price adjustment for 46% right share.
Top Broker Avg. Buy Price 230.29
Top Broker Avg. Sell Price 228.96
Concluding Remarks
From the above analysis, looking at the fundamental aspect of company, it is clear that the company has enjoyed a healthy
growth in business and its operations. As per the second quarter result of the fiscal year 2018/19, the bank has a capital
adequacy ratio of 12.90%, as against the minimum requirement of 11%. With the issuance of debenture, the capital adequacy
of the bank is likely to ease out. The company has a cost-to-income ratio of 40.47% as against the industry average of 38.72%.
The ratio can be considered at par with the industry, but it can improve its profitability if the ratio can be further brought
down.
The bank has a fairly long track record of operations, experienced promoters and management team and stable profitability.
Overall, the balance sheet size and business has quite increased in recent time and it can do better if it can keep up its growth
momentum without compromising on the quality of its assets.
Indicators Points Remarks
RSI (14) 81.03 SRBL is at an over bought zone.
MACD (12,26,9) 11.52 The MACD line is above baseline and the signal line. The MACD line above the signal line gives buy signal. Signal Line (12,26,9) 8.68
Histogram (12,26,9) 2.85
EMA (5,0) 260.92 EMA 5 is above the EMA 20 and the price is above both the EMAs, meaning that the stock is in bullish trend. EMA (20,0) 243.76
+DMI(13,8) 47.36 The +DMI is dominant over –DMI and ADX is above is at 63. This indicates that the current uptrend is significant. -DMI(13,8) 5.86
ADX (13,8) 63.17
Chaikin Money Flow (20) 0.3974 CMF is above the baseline which shows buying pressure for the stock in the market.
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