Best Insurance in Current Market Scenario? Comparative Study of Insurance’s Q4 of FY 2073/74 !

In current scenario, insurance companies are the most charmed scrip of both traders and investors. Earthquake of 2072 is the main reasons behind the drastic progress in insurance sectors as most of the people are acknowledge with its importance. If we look at the fourth quarter report as published by the insurance sectors, most of them have reported outstanding growth in terms of net premium collection, number of policies and timely settlement of claims as well which leads for the rise in reserve, insurance fund, earning per share (EPS), net worth per share and other fundamentals as well.

The scrip price traded in Nepal Stock Exchange (NEPSE) is quite impressive due to high volatility as traders are the one who speculates with this sectors to book capital gains rather than banking sector. Though there is high risk, there is also equal chances to make good profit. But one must deeply analyze and notified with all the fundamental of the companies in which they are pouring their investment. To simplify the major fundamentals, following data has been analyzed below:

(Note: Paid up, reserve, net premium & Insurance fund in Rs ‘000)

Among the 8 life insurance companies taken under the study, Rastriya Beema Sansthan (RBS) and Prime Life Insurance Company Limited (PLIC) topped the table with an Earning per Share (EPS) of Rs 73.29 and Rs 32.53 respectively. RBS’s net worth per share is also outstanding at Rs 3559.32. Nepal Life Insurance Company Limited (NLIC) has highest number of insurance policies of 10.41 lakh followed by National Life Insurance Company Limited (NLICL) with 8.75 lakh units policies.

Moreover, all the above life insurance must hike their capital to Rs 2 arba by the end of Ashad 2075 as per the directives of Insurance Board.

(Note: Paid up, reserve, net premium & Insurance fund in Rs ‘000)

With an EPS of Rs 190.46 and net worth of Rs 2522.23, Rastriya Beema Company Limited (RBCL) stood at the top of table in non-life insurance sector. Shikhar Insurance Company Limited (SICL) succeed to accumulate net premium collection of Rs 1.57 arba from 2.64 lakh units of insurance policies. United Insurance Company has not published its Q4 report yet, the data are as of Q3 of the FY 2073/74.

Moreover, all the above non-life insurance must hike their capital to Rs 1 arba by the end of Ashad 2075 as per the directives issued by Insurance Board.

(Note: Above data are trace out from Q4 report of the FY 2073/74 as published by the respective insurance companies and one must be acknowledge with the bonus shares and right shares which are yet to be listed to find out real position.)

Source: Sijan Bajracharya, ShareSansar; Friday August 25, 2017

Also Check These Out:

के साँचै अब आउने नै भो त बीमामा हकप्रद र बोनस सेयरको बाढी ?

आकर्षक बोनस पश्चात सर्वाधिक हकप्रद सेयर दिन तत्पर एभरेष्ट इन्स्योरेन्सले मार्यो खुद नाफा छलाङ !

राष्ट्रिय बीमा कम्पनी (RBCL) ले तीन आर्थिक बर्षको एकसाथ साधारणसभा गर्ने तयारी !

राष्ट्रिय बीमा कम्पनी (RBCL) अर्को दुई बर्षको साधारणसभा गर्ने तयारीमा, थप एक बर्षको बित्तीय बिवरण स्वीकृत !

जीवन बीमा कम्पनीको नाफामा उल्लेख्य वृद्धि

बीमा कम्पनीको शेयर किन्दै हुनुहुन्छ ? हेर्नुहोस् यस्तो छ जीवन बीमा कम्पनीको पछिल्लो अवस्था !

बीमा कम्पनीहरुको सेयरमा लगानी गर्नुअघि अबस्था थाहा पाउनुहोस् (तथ्य बिबरणसहित)

Do Investors Need to Apply Huge Amount on Upcoming IPO of Nepal Hydro & FPO of Pokhara Finance?

Recently, Securities Board of Nepal (SEBON) has implemented the Securities Issue and Allotment Guidelines, 2074 including several guidelines for IPO/FPO allotment, IPO listing, bonus share registration, right share issuance and commencement of trading after merger/acquisition.

ShareUpdateNepal

Under the new regulation, IPO/FPO should be allotted within minimum 30 days and listed within 2 months of the IPO closing date. Likewise, the Board has also made it mandatory for all applicants to be allotted a minimum of 10 units of shares—now replacing the existing provision to set aside 40% shares for retail investors and 60% shares for other investors under the securities allotment guidelines, 2068.

General Investors are confused regarding whether to apply huge amount like before or apply shares on low quantities for upcoming IPO and FPO of Nepal Hydro and Pokhara Finance respectively. Sharesansar tries to identify the answer for the investors based on new provisions and past IPO trend.

Let’s see, what are the provisions related to IPO allotment in newly implemented Securities Issue and Allotment Guidelines, 2074:

The guidelines clearly stated that all the IPO/FPO investors will be first allotted 10 units and then remaining units will be allotted to the investors demanding 20 units and more. Here, again 10 units will be allotted to such investors and if all the investors are unable to get minimum 10 units each then allotment will be based on lottery basis.

So based on above new guidelines from SEBON, now it will be useless to apply huge amount on upcoming IPO and FPO of Nepal Hydro and Pokhara Finance respectively like before.

Let's analyze past IPO/FPO number of applicants trend,

Based on the past IPO/FPO number of applicants’ trend, we can expect minimum 1 lakh applicants on any IPO/FPO.

Then what will be the strategy on the upcoming IPO of Nepal Hydro and FPO of Pokhara Finance.

Nepal Hydro Developers Limited (NHDL) – Initial Public Offerings (IPO):

Nepal Hydro Developers Limited is issuing 3,90,000 units to general public from 27th Shrawan, 2074. Out of 3,90,000 units, 27,300 units is set aside for mutual fund and staff which means just 3,62,700 units will be left for general public. As per the company announcement, investors can apply minimum 50 units and maximum upto 1000 units.

Here, 3,62,700 units are set aside for general public which means only 36,270 investors are eligible to get 10 units shares.

The minimum expected applicants will be 1 lakhs which means all investors won’t be able to get 10 units. In this case there will be lottery as per new guidelines.

Recommendation: Applying 10 units will be good enough but since the company has made mandatory to apply minimum 50 units. Investors are advised to apply just 50 units.

Pokhara Finance Limited (PFL) – Further Public Offering (FPO):

Pokhara Finance Limited is issuing 9,83,682 units to general public from 29th Shrawan, 2074 at Rs 220. As per the company announcement, investors can apply minimum 10 units and maximum upto 4900 units.

Here, 9,83,682 units are set aside for general public which means only 98,368 investors are eligible to get 10 units shares.

The minimum expected applicants will be 1 lakhs which means all investors will get 10 units or there can be meager chances of lottery. If number of applicants exceeds 1 lakh then there will be confirm lottery.

Recommendation: Investors are recommended to apply 10 or 20 units maximum.

Pros of New Guidelines:

• Small investors are benefited since there is high chance to get minimum 10 units.
• No need to apply huge amount on IPO/FPO like before. This means investors interest cost will be saved.
• Before there was a trend of selling shares on NEPSE and applying for IPO/FPO. Now people will apply less means there won’t be selling pressure on NEPSE due to IPO/FPO. NEPSE is positively affected.

Cons of New Guidelines:

• High chance of increase in fake applicants.
• Share will be scattered means manipulators can easily manipulate price of the share by holding just few thousand shares. (Cornering is possible)

Source: ShareSansar, August 6, 2017

How Much to Bid for Agriculture Bank (ADBL) in Auction?

Agricultural Development Bank Limited (ADBL) had issued right shares in the ratio 2:1 from Kartik 3 to Mangsir 7, 2073. In this issue period, 1 in 5 shares was not subscribed by the shareholders. ADBL is auctioning these unsold 19,68,575 units right shares to the general public at a premium price. The main question here lies: how much to bid in the ADBL auction?

At more than 19.68 lakh units shares worth more than Rs 19.68 crore in paid up value, this is the largest auction of unclaimed right shares of any company in Nepal. If the recent trend in cutoff prices of unclaimed right shares is taken into account, ADBL is expected to earn a good Rs 40-50 crores+ in premium.

Basis for bidding on unclaimed right shares

Investors interested in acquiring unclaimed shares normally should bid less than the market price. While there are some who might bid above the current market price, sensible investors always bid less than the market price. The logic here is simple: why spend more money in auction when you can get the same number of shares in the stock market for a lower price?

What does the cutoff price trend show?

Bidders typically look at the market price on the second last day of the auction when establishing base for the bid amount per share. Trend shows that the cutoff price is normally 10-20% less than the market price on the last day.

Let’s take a look at the recent auctions:

Cutoff price for development banks are far lower than for commercial banks. This means that interested bidders might get away with bidding more than 20% lower than the last closing price. The highest difference between market price and cutoff price for a commercial bank was for Prime Commercial Bank at 10.66%.

When Machapuchchhre Bank Limited (MBL) auctioned its 2,33,983.79 units ordinary right share to the general public, its cut off stood at Rs 525. The last trading price of Machapuchchhre Bank, a day before the bid opening day stood at Rs 560.

Likewise, Laxmi Bank Limited (LBL) had auctioned its 186,462 units ordinary right shares to the general public. The cut off price for the auction was set at Rs. 477.60 whereas the last trading price, a day before the bid opening day stood at Rs 517. When Sunrise Bank Limited (SRBL) auctioned its 1,66,248 units ordinary shares, the cut off price stood at Rs 426. The last trading price of shares of Sunrise Bank, a day before the bid opening was at Rs 452.

Less than 10% difference between the cutoff price and last traded price is seen in case of commercial banks.

Will the number of shares and maximum limit make a difference?

ADBL is auctioning 19.68 lakh units shares. In a sense, this can be seen as a mini-IPO or mini-FPO. Further, maximum cap of 10,000 units per application has been set for the auction. In the earlier week, the price of ADBL stock was also declining.

How much to bid?

The auction closes on Falgun 12 (February 23, 2017). It will be sensible to bid around 10-15% less than the last traded price of ADBL on Falgun 11. For example, if the closing price of ADBL on Falgun 11 will be Rs 450, it is recommended to bid around Rs 380 to Rs 400. Similarly, if the closing price of ADBL on Falgun 11 will be Rs 400, we can bid around Rs 340 to Rs 360.

Source: sharesansar