AAKASH CAPITAL LIMITED Weekly Newsletter from Aakash Capital Limited for the week ending on 7 th February, 2020 NEPSE UPDATE Indicators 2 nd Feb, 2020 6 th Feb, 2020 (+)/(-) Change % NEPSE 1325.38 1333.69 0.63% SENSITIVE 281.76 284.05 0.81% FLOAT 94.05 94.58 0.56% SEN. FLOAT 93.03 93.72 0.74% BANKING 1148.92 1153.81 0.43% TRADING 786.53 802.66 2.05% HOTELS 2042.32 1987.1 -2.70% DEVELOPMENT BANKS 1781.46 1831.21 2.79% HYDROPOWER 1001.23 1021.32 2.01% FINANCE 662.08 670.78 1.31% NON LIFE INSURANCE 5901.45 6029.03 2.16% MANU. & PRO. 2466.15 2489.86 0.96% OTHERS 674.46 686.87 1.84% MICROFINANCE 2207.57 2187.63 -0.90% LIFE INSURANCE 7558.53 7500.16 -0.77% MUTUAL FUND 10.15 9.99 -1.58% Market Summary Statistics (2 nd to 6 th Feb, 2020) Total Turnover (Rs) 7,391,702,510 Total Traded Shares 21,106,353 Total Number of Transactions 81,405 Scrips Traded 177 Market Cap at Week start 1,717,566.96 Millions Market cap at Week end 1,701,040.41 Millions Floated Market Cap at Week start 627,390.17 Millions Floated Market Cap at Week end 620,399.89 Millions Bullion Update As on 7 th February 2020 Hallmark Gold Rs.75,600/tola Worked Gold Rs.75,300/tola Silver Rs.885/tola Quote for the week “Don't blindly follow someone, follow market and try to hear what it is telling you.” - Jaymin Shah The market increased by 0.63% (8.31 points) in the trading week between 2 nd and 6 th February 2020. The sensitive index, which measures the performance of the companies classified under group “A”, also registered the gain of 0.81% (2.29 points). Similarly, float index which measures the performance of securities which are floated to public also went up by 0.56% and sensitive float followed the trend by increasing 0.74%. This week market opened at 1325.38 on Sunday and went up 21.26 points to sit at 1346.64 level. The positive sentiment continued on Monday with 2.49 points gain. But the market declined 12.09 points on Tuesday to close at 1337.04 level. Market again tried to follow positive trend on Wednesday with 5.32 points gain, but couldn’t continue its momentum on Thursday and declined by 8.67 points to end the week at 1333.69 level. In this review period, among 12 sub-index 8 were able to close higher. Development Banks sub-index registered the highest gain of 2.79% this week. Non- Life insurance sub-index which gained 8.48% last week continued its increasing trend with the gain of 2.16% followed by trading sub-index with 2.05% in the review period. Similarly, Banking, Hydropower, Finance, Manu & Pro, and Others sub-index registered the gain of 0.43%, 2.01%, 1.31%, 0.96% and 1.84% respectively. However, Hotels, Microfinance, Life Insurance and Mutual fund sub-index registered the fall of 2.70%, 0.90%, 0.77% and 1.58% respectively in the review period. The market witnessed supportive volume of transaction turnover this week. The total turnover stood at Rs.7.39 billion with average of Rs.1.47 billion a day. The total market value increased by Rs.10,589.09 million as the market capitalization went up by 0.63%. Similarly, floating market cap also registered the gain of 0.56% this trading week.
Transcript
AAKASH CAPITAL LIMITED Weekly Newsletter from Aakash Capital Limited for the week ending on 7th February, 2020
NEPSE UPDATE
Indicators 2nd Feb,
2020 6th Feb,
2020
(+)/(-)
Change %
NEPSE 1325.38 1333.69 0.63%
SENSITIVE 281.76 284.05 0.81%
FLOAT 94.05 94.58 0.56%
SEN. FLOAT 93.03 93.72 0.74%
BANKING 1148.92 1153.81 0.43%
TRADING 786.53 802.66 2.05%
HOTELS 2042.32 1987.1 -2.70%
DEVELOPMENT BANKS 1781.46 1831.21 2.79%
HYDROPOWER 1001.23 1021.32 2.01%
FINANCE 662.08 670.78 1.31%
NON LIFE INSURANCE 5901.45 6029.03 2.16%
MANU. & PRO. 2466.15 2489.86 0.96%
OTHERS 674.46 686.87 1.84%
MICROFINANCE 2207.57 2187.63 -0.90%
LIFE INSURANCE 7558.53 7500.16 -0.77%
MUTUAL FUND 10.15 9.99 -1.58%
Market Summary Statistics (2nd to 6th Feb, 2020)
Total Turnover (Rs) 7,391,702,510
Total Traded Shares 21,106,353 Total Number of Transactions 81,405 Scrips Traded 177
Market Cap at Week start 1,717,566.96 Millions
Market cap at Week end 1,701,040.41 Millions
Floated Market Cap at Week start 627,390.17 Millions
Floated Market Cap at Week end 620,399.89 Millions
Bullion Update
As on 7th February 2020 Hallmark Gold Rs.75,600/tola
Worked Gold Rs.75,300/tola
Silver Rs.885/tola
Quote for the week
“Don't blindly follow someone, follow market and try
to hear what it is telling you.” - Jaymin Shah
The market increased by 0.63% (8.31 points) in the
trading week between 2nd and 6th February 2020. The
sensitive index, which measures the performance of
the companies classified under group “A”, also
registered the gain of 0.81% (2.29 points). Similarly,
float index which measures the performance of
securities which are floated to public also went up by
0.56% and sensitive float followed the trend by
increasing 0.74%.
This week market opened at 1325.38 on Sunday and
went up 21.26 points to sit at 1346.64 level. The
positive sentiment continued on Monday with 2.49
points gain. But the market declined 12.09 points on
Tuesday to close at 1337.04 level. Market again tried
to follow positive trend on Wednesday with 5.32
points gain, but couldn’t continue its momentum on
Thursday and declined by 8.67 points to end the week
at 1333.69 level.
In this review period, among 12 sub-index 8 were able
to close higher. Development Banks sub-index
registered the highest gain of 2.79% this week. Non-
Life insurance sub-index which gained 8.48% last week
continued its increasing trend with the gain of 2.16%
followed by trading sub-index with 2.05% in the review
period. Similarly, Banking, Hydropower, Finance, Manu
& Pro, and Others sub-index registered the gain of
0.43%, 2.01%, 1.31%, 0.96% and 1.84% respectively.
However, Hotels, Microfinance, Life Insurance and
Mutual fund sub-index registered the fall of 2.70%,
0.90%, 0.77% and 1.58% respectively in the review
period.
The market witnessed supportive volume of
transaction turnover this week. The total turnover
stood at Rs.7.39 billion with average of Rs.1.47 billion
a day. The total market value increased by
Rs.10,589.09 million as the market capitalization went
up by 0.63%. Similarly, floating market cap also
registered the gain of 0.56% this trading week.
.
Market Announcements
Nepal SBI Bank Limited has published an offer letter to issue (25,00,000 units @ Rs.1000 per unit) 10% Nepal SBI Bank Rinpatra 2086 to the general public from (28th Magh to 2nd Falgun, 2076).
Soaltee Hotel Limited is distributing 11.31% cash dividend directly to bank accounts to its shareholders and urged its shareholders to dematerialize their shares.
Mero Microfinance Laghubitta Bittiya Sanstha Limited is distributing 30% bonus share directly to DEMAT accounts to its shareholders and urged its shareholders to dematerialize their shares.
Prabhu Bank Limited is distributing 16% bonus share directly to DEMAT accounts to its shareholders and urged its shareholders to dematerialize their shares.
Nepal Investment Bank Limited has posted a net profit of Rs 1.66 billion and published its 2nd quarter company analysis of the fiscal year 2076/77.
Sanima Life Insurance Company Limited has posted a net profit of Rs 48.08 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Mahalaxmi Life Insurance Limited has posted a net profit of Rs 51.80 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Asian Life Insurance Company Limited has posted a net profit of Rs 121.39 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
United Insurance Company (Nepal) Limited has posted a net profit of Rs 20.25 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Siddhartha Insurance Limited has posted a net profit of Rs 91.60 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Green Development Bank Limited has posted a net profit of Rs 10.42 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Shine Resunga Development Bank Limited has posted a net profit of Rs 300.79 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Mahalaxmi Bikas Bank Limited has posted a net profit of Rs 305.07 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Nepal Infrastructure Bank Limited has posted a net profit of Rs 402.78 million during the 2nd quarter of the fiscal year 2076/77.
Nepal Finance Limited has posted a net profit of Rs 24.17 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Goodwill Finance Limited has posted a net profit of Rs 60.11 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Manushi Laghubitta Bittiya Sanstha Limited has posted a net profit of Rs 4.92 million during the 2nd quarter of the fiscal year 2076/77.
Sadhana Laghubitta Bittiya Sanstha Limited has posted a net profit of Rs 18.98 million during the 2nd quarter of the fiscal year 2076/77.
Swabalamban Laghubitta Bittiya Sanstha Limited has posted a net profit of Rs 264.48 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Kalika Laghubitta Bittiya Sanstha Limited has posted a net profit of Rs 2.70 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Grameen Bikas Laghubitta Bittiya Sanstha Limited has posted a net profit of Rs 111.89 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Support Microfinance Bittiya Sanstha Limited has posted a net profit of Rs 6.37 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Panchthar Power Company Limited has posted a net profit of Rs 81.78 million and published its 2nd quarter company analysis of the fiscal year 2076/77.
Bindhyabasini Hydropower Development Company Limited has announced its 3rd AGM going to be held on 22nd Falgun, 2076.
Shuvam Power Limited has announced its 5th AGM going to be held on 16th Falgun, 2076.
The Nepalese stock market (NEPSE) seems to be in the end of bearish trend after falling from July, 2016 as index has already
crossed the long term bearish trend line. Currently, Market seems to be in a correction phase after making new height of 1355
this Monday. This week NEPSE opened at 1325.38 and formed a green candle by closing at 1346.64, gaining 21.26 points during
the day. The overall market gained 8.31 points during the week as it closed at 1333.69 by marking a red candle on Thursday. This
week the average turnover has increased to Rs.1.47 billion from Rs.1.30 billion of previous week. As of daily line chart strong
support level might be at around 1276 level.
TECHNICAL INDICATORS
Indicators Value Signal
Support (S1) 1276 -
Resistance (R1) 1349 -
Relative Strength Index (RSI) 65.53 Bullish
Moving Average Convergence Divergence (MACD) 34.50 Bullish
5-Day Exponential Moving Average (EMA) 1335.38 Bearish
20-Day Exponential Moving Average (EMA) 1301.29 Bullish
180-Day Exponential Moving Average (EMA) 1213.20 Bullish
Relative Strength Index (RSI) Analysis
RSI is a moment indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions
in the price of a stock. RSI is typically used on a 14-day time frame, measured on a scale from 0 to 100, where a value above 70
represents overbought and below 30 represents oversold condition.
Current RSI value of NEPSE is 65.53 which indicates that the market is at bullish zone. As on daily chart from January 19 to February
3, there seems the formation of bearish divergence which indicates the possibility of correction in the market.
Bollinger Band
Bollinger band is a technical indicator that consists of a set of lines plotted two standard deviations up and below a 21-day simple
moving average. The bands are an indication of volatility; a widening gap indicates higher volatility and vice-versa. Prices are
relatively high when above the upper band and low when below the lower band.
The upper, middle and the lower bands are at 1365.60, 1310 and 1254.40 respectively. The market is trading in between upper
and middle band which indicates the market is at bullish zone.
Stock Analysis: NIC Asia Bank Limited (NICA)
NIC ASIA Bank has its antecedents in NIC Bank which was established on 21st July 1998. The Bank was rechristened as NIC ASIA Bank after the merger of NIC Bank with Bank of Asia Nepal on 30th June 2013. This was a historic merger in the annals of Nepalese financial landscape as the first of its kind merger between two successful commercial banks in the country. Today, NIC ASIA has established itself as one of the most successful commercial banks in Nepal.
NIC ASIA Bank is now, one of the largest private sector commercial banks in the country in terms of capital base, balance-sheet size, number of branches, ATM network and customer base. The Bank has 313 branches, 104 extension counters, 48 branch less banking and 433 ATMs across Nepal with a network covering all major financial centers of the country. The Bank strongly believes in Meritocracy, Transparency, Professionalism, Team spirit and Service Excellence. These core values are internalized by all functions within the Bank and are reflected in all actions the Bank takes during the course of its business.
Board of Director The promoters of the bank are well experienced in sectors like banking, insurance, manufacturing, import and export, trading etc. Similarly, the BOD includes eminent businessmen and industrialists with wide experience in the financial services. Mr. Tulsi Ram Agrawal is the Chairman of the bank, who has been engaged in industry, banking and business sector for more than 30 years. Mr. Roshan Kumar Neupane is the current CEO, who is a Chartered Accountant by qualification and has been working at NIC Asia since March 2008 at various managerial positions.
Name Designation
Mr. Tulsi Ram Agrawal Chairman
Mr. Trilok Chand Agrawal Director
Mr. Ram Chandra Sanghai Director
Mr. Rajendra Prasad Aryal Director
Mr. Binod Kumar Pyakurel Director
Mr. Ganesh Man Shrestha Director
Mr. Nikunj Agrawal Director
(Source: https://www.nicasiabank.com/)
Current Share Holding Composition
NICA has authorized capital of NPR 8.84 billion and paid up capital of NPR 8.83 billion. The current shareholder structure
Book Value Per share (Rs.) 149 161 151 145 169.06 -
Market Value per share (Rs.) 617 798 445 316 448 -
Price Earnings Ratio 24.11 28.19 19.30 19.01 13.09 -
Capital Fund to RWA (CAR) % 12.49% 12.44% 13.83% 12.24% 13.32% -
Non-Performing Loan(NPL) to Total Loan %
0.41% 0.11% 0.04% 0.01% 0.23% -
Total Staff number 730 1,101 1,755 2,291 3,472 -
No. of Branches 67 67 119 231 292 -
No. of ATM 68 69 70 220 302 -
Based on the data presented above, the bank has made consistent growth in all its fundamentals in last five years. The bank has
followed an aggressive growth strategy. It opened more than 100 branches in the FY 2017/18 and 61 branches in the FY 2018/19
alone. As such, it has seen a huge growth in its deposit collection and loan provided to its customers in last two years. As of 2018/19
Bank’s Reserve stands at Rs.3.98 billion with 47.96% growth in 2018/19. Similarly it has reported 26.67% growth in Deposit
collection, 23.12% in Loan & Advances to customer which have let interest income to grow by 42.82% and Net Profit by 126.49% in
2018/19. The Bank had negative growth of 2.24% in Net Profit in 2017/18 due to increase in Operating Expenses. However, it was
able to show outstanding growth in 2018/19.
The bank has met its paid-up capital of Rs.8 arba as directed by Nepal Rastra Bank in fiscal year 2017/18. Evaluating indicators like
Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) to Total Loan, they seems to be in a stable position. The bank has
reported CAR of 13.32% and NPL of 0.23% which is under the criteria directed by the Central Bank. Similarly, bank is providing
consistent dividend either in the form of cash or bonus. Looking at the history of dividend distribution, the bank seems to be highly
focused on distributing bonus share.
Evaluating the above fundamental indicators, the company has sound fundamental and has huge potential in the Nepalese
emerging financial market. If it can maintain its operating cost, and quality of its loan in the years to come, it can do even better.
Financial Highlights
369.50 457.54
669.26
803.11 883.42
180.38 161.07 187.77 269.57
398.86
-
200.00
400.00
600.00
800.00
1,000.00
2014/15 2015/16 2016/17 2017/18 2018/19
Paid-up Capital & Reserve
Paid-up Capital (Rs.crores) Reserve (Rs.crores)
5,347.72 6,460.68 7,990.56
13,958.96
17,682.07
4,214.43 5,787.64 7,061.58
11,580.46
14,257.40
-
5,000.00
10,000.00
15,000.00
20,000.00
1 2 3 4 5
Deposits & Loans
Deposit Liabilities (Rs.crores)
Loan, advances to customers (Rs.crores)
68.03 106.69
136.54 133.49
302.33
25.59 28.31 23.06 16.62 34.22
-
100.00
200.00
300.00
400.00
2014/15 2015/16 2016/17 2017/18 2018/19
Net Profit vs EPS
Net Profit (Rs.crores) EPS (Rs.)
25.59 28.31 23.06 16.62 34.22
617
798
445
316
448
-
200.00
400.00
600.00
800.00
1,000.00
2014/15 2015/16 2016/17 2017/18 2018/19
EPS vs MVPS
EPS (Rs.) Market Value per share (Rs.)
42.18 54.33
113.29
178.21 247.68
68.03 106.69
136.54
133.49
302.33
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2014/15 2015/16 2016/17 2017/18 2018/19
Personnel Expenses vs Net Profit
Personnel Expenses (Rs.crores) Net Profit (Rs.crores)
42.18 54.33 113.29 178.21 247.68 730
1,101
1,755 2,291
3,472
-
1,000.00
2,000.00
3,000.00
4,000.00
2014/15 2015/16 2016/17 2017/18 2018/19
Total No of Staff vs Personnel Expenses
Personnel Expenses (Rs.crores) Total Staff number
13.05%
16.50% 16.84%
12.09%
22.73%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2014/15 2015/16 2016/17 2017/18 2018/19
Return on Equity (ROE) %
41.05%
27.37%21.05%
10.00%
21.05%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
2014/15 2015/16 2016/17 2017/18 2018/19
DPS ( INCLUDING BONUS) %
Technical Analysis of NICA as on February 6, 2020
Day Candle
Open 483
High 485
Low 479
Close 481
Pattern Analysis
Resistance R1: 500 R2: -
Support S1: 465 S2: 455
Particulars Points Remarks
Volume 66,736 The daily volume of stock is lower than both 1
week‘s and 1 month’s average volume. Avg. Volume (1 week) 75,411.00
Avg. Volume (1 month) 86,774.29
No. of Transaction 232 The daily number of transaction is lower than both 1 week and 1 month’s average no of transaction.
Avg. no. of Transaction (1 week) 260.20
Avg. no. of Transaction (1 month) 306.19
180 days Average (Rs.) 436.69 The price of the stock is trading above both 180 day’s 360 day’s average. 360 days Average (Rs.) 423.46
52 Weeks High Price (Rs.) 515 The stock is currently trading in between 52 week’s high and low price. 52 Weeks Low Price (Rs.) 368
Nepse Index 1 year Change 17.02% The overall market and industry has gained in last 1 year. Similarly, the stock has also gained in last 1 month and even more in last 12 months.
Industry Index 1year Change 18.47%
Stock 1-Month Change 9.32%
Stock 1-Year Change 24.29%
Total Holdings of Mutual Funds (Poush, 2076) 427,326 The Mutual Funds are holding less no of shares of the company.
Quarterly Analysis
Particulars Q2, 2018/19 Q2, 2019/20 Growth (%)
Paid-up Capital (Rs.000) 8,834,228.70 9,717,651.57 10.00%
Deposits from customers (Rs.000) 171,428,410.60 178,743,869.72 4.27%
Loans & advances to customers (Rs.000) 142,574,005.95 151,452,735.08 6.23%
Net Profit (Rs.000) 1,511,458.69 2,016,225.62 33.40%
Earnings per share 34.31 41.61 21.28%
Net worth per share 149.93 164.87 9.96%
P/E ratio 11.25 10.65 -5.33%
Credit to Deposit Ratio (%) 78.71% 78.18% -0.67%
Capital fund to RWA (%) 11.97% 12.75% 6.52%
Looking at the second quarter results of the bank, it has reported 10% increase in Paid-up capital to Rs.9.71 billion. Similarly,
Deposits from customers has increased by 4.27% to Rs.178.74 billion which have let Loans & advances to customers to increase
by 6.23% and Net Profit by 33.40% to Rs.2.01 billion. Bank has reported Credit to Deposit Ratio of 78.18% and Capital fund to
RWA of 12.75% which indicates the safer size of its fundamentals.
Concluding Remarks
From the above analysis, it is clear that the company has enjoyed a healthy growth in business and its operations. Currently, it is providing its services through 313 branches, 104 extension counters, 48 branch less banking and 433 ATMs across Nepal and it seems to be in a stable position with its sound fundamentals and possess potential to grow further in the Nepalese financial market where only 45% of the population are access to the banking system.
Indicators Points Remarks
RSI (14) 63.25 NICA is at bullish zone.
MACD (12,26,9) 13.40 The MACD line is below the signal line and both are above the baseline.
Signal Line (12,26,9) 14.76
Histogram (12,26,9) -1.35
EMA (5,0) 481.78 The price is trading around EMA 5 days and above EMA 20 days moving average. EMA (20,0) 469.69
+DMI(13,8) 34.36 The +DMI is dominant over -DMI and ADX is at 47.60
-DMI(13,8) 13.99
ADX (13,8) 47.60
The following table shows the total dividend declared by Manufacturing and Processing Companies from the profit of
