Arun Valley Hydro Development began issuing its IPO on June 23. It reported receiving applications worth Rs 160 million that day. It floated 515,000 primary shares at a premium of Rs 184. Public Development Bank is scheduled to begin its IPO issue next week. Investors were kept waiting for Chilime´s much anticipated IPO, a decision on which was further postponed to June 29. Locals affected by the hydropower project took their case to the Supreme Court after the company issued a notice allocating to them only 5% of the IPO instead of the formerly announced 8%.
Among rights issues, Patan Finance and Everest Finance started issuing rights shares this week. Excel Development Bank and Lumbini Finance and Leasing have been issuing their right shares since earlier this month. Additionally, Nepal Share Market will issue its right shares from next week.
Among the sectors, Hydropower (+1.60%) alone registered a gain mainly due to an increase in price for Butwal Power Company Limited, the highest gainer for the week. The Finance sector (-6.52%) was the biggest loser for the week as Nepal Share Market´s price declined after the book closure on its right issue of 1:3.63. Investors seem to be liquidating their holdings in the Development Bank and Insurance sectors to fund their IPO and rights share investments as the two sectors fell by 2.87% and 1.58% respectively.
The Others sector remained unchanged but the Commercial Banking sector fell by 2.01%. While top banks declined only marginally, the rest suffered in the bear market partly due to negative sentiment towards the banking sector following Nepal Rastra Bank´s decision to liquidate Nepal Development Bank. The decision to liquidate came after the explanation provided by Nepal Development Bank on how it would recover from its fragile state was deemed inadequate. The market turnover for the week (Rs 226,910,168) constituted a decreased of 1.76%. With more IPO and rights share issues scheduled for next week, and technical analysis- namely the centerline crossover of the MACD- indicating a downtrend, the market is expected to remain sluggish.
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