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More return from shares of medium companies


The investors have earned more from shares of the medium level companies with smaller price from the transactions in the past two and half months. The Nepal Stock Exchange (Nepse) has risen by around 200 points after the second election of Constituent Assembly (CA), while the share price of over half a dozen of 87 companies, whose shares are traded frequently, have increased by more than 100 percent. Most of the companies whose share price has increased more have a lower share price.
The Nepse index has risen by 183.49 points to 783.91 after the CA election. It is greater than that on November 14, when Nepse reached 600, by 30.56 percent. The market that crossed 800 in two and half months after that has dropped to 783.91 on Wednesday. The share price of majority of companies whose shares are frequently traded has risen during the period.
The investors who had invested in shares of Everest Bank at the rate of Rs 1,664 on November 14 have earned Rs 513 or 30.82 percent by Wednesday. Similarly, those who had invested Rs 140 for shares of United Insurance Company have earned Rs 200 or 142.85 percent. The share price of Life Insurance Corporation has reached Rs 2,450 after rising by Rs 687 in the period while the share price of Shine Resunga Development Bank has risen by 128.34 percent from Rs 170 to Rs 388. The share price of Self Employment Micro Finance Development Bank has also risen by 110.74 percent from Rs 410 to Rs 864. United Insurance has seen the biggest rise in terms of percentage while Nepal Life Insurance has seen the biggest rise in terms of rupee per unit. The share price of Nepal Life Insurance that was Rs 2,479 per unit on November 14 has risen by Rs 1,151 to Rs 3,630 by Wednesday.  
The investors investing in insurance, hydropower and micro finance companies have earned more. Though those who have invested in commercial banks, development banks, and finance companies have earned, they have earned less. Those who have invested in insurance companies have earned more than those who have invested in groups. Spokesperson of the Securities Board of Nepal (SEBON) Niraj Giri stated that investors have been attracted toward micro finance companies after a few of them provided good return. “The investors seem to be targeting greater return by making a smaller investment. This is a sign of maturity,” he said. “The majority of companies have chosen the medium companies as they provide greater return than blue-chip companies,” he reasoned. He explained that the share price of insurance and hydropower companies also rose more as they provided better return than others.
Investor Ambika Prasad Poudyal reasoned that the share price of insurance and micro finance companies has risen more as development banks and fiancĂ© companies have invested in the shares of insurance and micro finance companies. Stating that a short-term institutional investment on shares has a negative impact on the market he said, “The market will improve if it is held for a long period.” He revealed that the return provided by the insurance and micro finance companies is also comparatively better.  
Former President of the Stockbroker Association of Nepal Anjan Raj Poudyal also confirmed that investors investing in the insurance and micro finance companies have earned more. “There was comparatively under-pricing of shares of insurance companies until some time back. The share price of insurance and hydropower companies has risen now as the banks and financial institutions are investing on them,” he reasoned. He explained that the financial institutions have started to invest on insurance and hydropower companies as investing on companies of similar nature will lead to cross-holding. He explained that the price of insurance companies has risen more than others also because the Collective Investment Trust has also invested on shares of insurance companies while managing investment. He argued that attraction of insurance companies has also increased as they have distributed bonus shares in good proportion while raising paid-up capital.                 
10 companies whose share price has increased most in rupee after November 14
Company
Wednesday
Nov 14
Difference
Nepal Life Insurance Company
3630
2479
1151
Life Insurance Corporation
2450
1763
687
National Life Insurance
1840
1235
605
Everest Bank
2177
1664
513
Butwal Power Company
1270
800
470
Shikhar Insurance
1000
544
456
Self Employment Micro Finance Development Bank
864
410
454
Summit Micro Finance
890
459
431
Sagarmatha Insurance
1161
835
326
Rural Micro Finance Development Bank
880
560
320
    10 companies whose share price has increased most in percent after November 14
Company
Wednesday
Nov 14
Difference
United Insurance
340
140
142.86
Shine Resunga Development Bank
388
170
128.34
Self Employment Micro Finance Development Bank
864
410
110.74
Alliance Insurance
550
263
109.125
Triveni Development Bank
323
159
103.144
City Development Bank
385
192
100.52
Bishwo Development Bank
265
133
99.25
Summit Micro Finance
890
459
93.89
Machhapuchchhre Bank
465
250
86
Shikhar Insurance
1000
544
83.83

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