share market in nepal

Debt financing vs. Equity financing

2009-09-02T20:57:00.000-07:00

Why does a company issue stock? Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under the umbrella of debt financing. On the other hand, issuing stock is called equity financing. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will someday be worth more than what they paid for them. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO).

It is important that you understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money (the principal) along with promised interest payments. This isn't the case with an equity investment. By becoming an owner, you assume the risk of the company not being successful - just as a small business owner isn't guaranteed a return, neither is a shareholder. As an owner, your claim on assets is less than that of creditors. This means that if a company goes bankrupt and liquidates, you, as a shareholder, don't get any money until the banks and bondholders have been paid out; we call this absolute priority. Shareholders earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful.

State Bank of India (SBI) Owned 55% of shares in Nepal (SBI)

2009-06-04T20:22:00.000-07:00

State Bank of India (SBI) Owned 55% of shares in Nepal (SBI)

State Bank of India (SBI), India's largest bank has purchased 5 percent shares of Nepal SBI which was previously owned by Agriculture Development Bank of Nepal. Nepal SBI Bank is the first Indo-Nepal joint venture in the financial sector sponsored by three institutional promoters — SBI, Employees Provident Fund and Agricultural Development Bank of Nepal. SBI now has 55% of shares in Nepal SBI, which was 50% before the purchase of 4,37,400 shares from ADB Nepal. Apart from it, Employees Provident Fund (EPF) has15 % and general public holds 35 % of shares in Nepal SBI.Nepal Rastra Bank had made a provision that one financial institution can't keep the cross hold share of other financial institution. Hence, ADB Nepal was liable to sell the promoter shares of Nepal SBI appointing ACE development bank as the issue manager.The sell of shares was on competitive bid process and SBI bank had agreed to pay maximum amount amongst eight competitive groups thus the shares of Nepal SBI was sold to SBI, said sources of ADB Nepal. SBI had compete with two different prices, RS.1502 for 3,49,290 shares and Rs. 1492 for 87,840 shares.Total of 87,34,791 shares of Nepal SBI is listed in Nepal Stock Exchange and had market price of Rs. 1751 Tuesday. In India, SBI had market price Rs. 1897.80 (INR) Tuesday at Bombay Stock Exchange. Nepal SBI had earned about 225.182 millions during nine months of the current fiscal year which was 144.45 million in the same period last year.

Nepal Development Bank's shares suspended on liquidity news !

2009-06-04T20:09:00.000-07:00

NDB's shares suspended on liquidity news

At last Nepal Stock Exchange has decided to make a very big dicision on Nepal Stock's history.
Nepal Stock Exchange has suspended the trading of "Nepal Development Bank" and "Nepal Development Bank Limited Promoter Share" as the liquidation news of the company flared in.Nepal Rastra Bank (NRB) decided to send the long-troubled Nepal Development Bank into liquidation after concluding that all its five-year long efforts to revive the bank failed owing to incompetent and defiant management.

gold price - by David Haselhurst.

2009-02-09T20:24:00.000-08:00

Gold price soars to record
While Citigold’s report largely escaped public attention, the Australian dollar gold price soared on Monday to a record $A1470/oz, based on a price that day of $US927/oz and an exchange rate of $A/$US0.63.
It has come back slightly since but remains in line with leading broker predictions. Both Morgan Stanley and UBS have raised their short term gold price projections for 2009 to $US900/oz, with UBS predicting $US1,000/oz in 2010.
That spells promise for Citigold with a target to reach annual production of 250,000oz by 2011, rising to 310,000oz by 2012, with a projected mine life of 30 years based on a present resource of 10 million oz of gold within 22 million tonnes or ore grading 14 gm/tonne.
The ambitious targets are under-pinned through a $35 million cash commitment from Dubai Ventures Group which will ultimately hold an 18% equity in the company.
Those longer term projections have tested the patience of some investors in today’s cash-strapped market, however. In January a sole US investor in need of cash dumped its holding of 5 million shares on the market and sold the stock down to as low as 18c, although the company has since recovered somewhat. At 20.5c, the company’s 736.2 million shares carry a market capitalization of $147 million.
Cash has been run down in the latest quarter by nearly $10 million in development expenditure, offset by $4.79 million in sales from modest production of 2569oz of gold from low grade material excavated in developing access to ore lodes.
At the end of the quarter, the company had $15 million in an undrawn advance from the Dubai fund and the company expects a significant increase in gold production in the current quarter.
The December quarter saw underground development advance 835 metres (including the western decline from the surface), so the company now has two production areas from which to access ore from the Warrior Reef in the current quarter with a third area to be accessed towards the end of this quarter on a parallel reef with initial face grades running as high as 20gm/tonne gold.

avoid these mistakes while investing

2008-11-24T19:22:00.000-08:00

Don't try to shoot for big gains by finding the next Standard Chartered. Instead, focus on finding solid companies with shares selling at low valuations.

Understanding the market's history can help you avoid repeated pitfalls. If people try to convince you that "it really is different this time," ignore them.

Don't fall into the all- too-frequent trap of assuming that a great product translates into a high-quality company. Before you get swept away by exciting new technology or a nifty product, make sure you've checked out the company's business model.

Don't be afraid to use fear to your advantage. The best time to buy is when everyone else is running away from a given asset class.

Attempting to time the market is a fool's game. There's ample evidence that the market can't be timed.

The best way to reduce your investment risk is to pay careful attention to valuation. Don't make the mistake of hoping that other investors will keep paying higher prices, even if you're buying shares in a great company.

Cash flow is the true measure of a company's financial performance, not reported earnings per share.

how to become a successful investor

2008-11-24T19:17:00.000-08:00

Successful investing depends on personal discipline, not on whether the crowd agrees or disagrees with you. That's why it's crucial to have a solid, well-grounded investment philosophy.

1. Don't buy a stock unless you understand the business inside and out. Taking the time to investigate a company before you buy the shares will help you avoid the biggest mistakes.

2. Focus on companies with wide economic moats that can help them fend off competitors. If you can identify why a company keeps competitors at bay and consistently generates above-average profits. You¿ve identified the source of its economic moat.

3. Don't buy a stock without a margin of safety. Sticking to a strict valuation discipline will help you avoid blowups and improve you investment performance.

4. The costs of frequent trading can be a huge drag on performance over time. Treat your stock buys like major purchases, and hold on to them for the long term.

5. Know when to see. Don't sell just because the price has gone up or down, but give it some serious thought if one of the following things has happened: You made a mistake buying it in the first place, the fundamentals have deteriorated, the stock has risen well above its intrinsic value, you can find better opportunities, or it takes up too much space in your portfolio.

is this the time to invest in shares?

2008-11-24T19:11:00.000-08:00

I don't know if this is the time to invest or not, but what i know is lots and lots of people read Abhiyaan. Because of Abhiyaan head line Banks will not be able to make profit in the head line made the crash yesterday. People do not read the news fully as it is written in the news itself L/C income of banks is only 5-6% and if you see the profit made by most of the banks is higher in 1st quater of this year. People belive in newspaper so much in Nepal they follow blindly what they say without finding the facts. You should read and hear news but ...but .....you should use your head to find out the facts. This is my opion you should belive in your self.THANKs

2008-11-24T19:10:00.000-08:00

reasons for downfall of share price

2008-11-24T19:09:00.000-08:00

I see basically two reason for current downfall of share prices. The first one is the small shareholders who easily loose their confidence and tends to sell their share at whatever price they get. In fact they would not have much effect with plus/minus 5-10%. The second major one is the market players i.e. share maphias who intentionally decreases the prices for their own benefit. We see share prices start to decrease through small volume of transactions i.e. 10-20 kittas only. So I also urge all the genius investors not to loose your confidenceYOU WILL LOSE MORE IF BECOME MORE PANIC THANX

shares for best results

2008-11-24T19:06:00.000-08:00

Dear Friends,
It is my personal view, but if you can manage funds for around a year, this is the right time to invest in shares for best results as the prices have gone down significantly, you can have good stocks at very good prices. We can not predict that market will go down further, but once it has already lost more than 500 pts, it is time to go up, it may go upto 700 then bounce back.So happy buying, call your broker to order shares now.