The Nepal Stock Exchange (Nepse) has classed 114 listed companies as A category for the fiscal year 2014-15. An overwhelming majority of these top ranking companies belong to the financial sector while four are from the real sector and 15 are from the insurance group.
Last year, the Nepse had awarded the A classification to 130 companies. This is the second time that the list of A companies has shrunk. In 2012-13, there were 120 A class companies.
According to Nepse, a listed company should have a paid-up capital of at least Rs 20 million and at least 1,000 general shareholders and be earning profits for the last three years to be inducted into the select list.
Among other requirements, the company’s book value should not be lower than the paid-up value and it should have submitted its annual financial report within six months of the end of the fiscal year.
The drop in the number of A class companies has been attributed to growing mergers among financial institutions in recent times.
“The merging of a number of commercial banks and development banks last year led to the decline in the number of listed companies,” said Sambhu Pant, spokesperson of Nepse.
Moreover, a drop in profits of Grand Bank, which is in the process of merging with Prabhu Bank, has also played a role in the shortened list of A class companies. “In addition, Unilever Nepal has been excluded from the list for failing to submit its financial report on time,” said Pant.
Out of the 237 listed companies, development banks form the largest group in the elite list with 46. Similarly, 25 commercial banks, 23 finance companies, 15 insurance companies, three hydropower companies and one each from the hotels and other groups have made it into the A list.
Narendra Raj Sijapati, president of the Nepal Stockbrokers’ Association, said the ranking process was a positive practice. “Though it is not complete, it is satisfactory to assess the performance of the listed companies in the secondary market,” he added.
According to stockbrokers, most potential investors consider investing in A class companies. Sijapati said they felt confident buying shares in these companies. “About 70 percent of the investment have been made in such companies.”
Nepse has been honouring selected companies by putting them in the A list annually since 1996-97.
source: the kathmandu post,19 feb 2015LINK
Last year, the Nepse had awarded the A classification to 130 companies. This is the second time that the list of A companies has shrunk. In 2012-13, there were 120 A class companies.
According to Nepse, a listed company should have a paid-up capital of at least Rs 20 million and at least 1,000 general shareholders and be earning profits for the last three years to be inducted into the select list.
Among other requirements, the company’s book value should not be lower than the paid-up value and it should have submitted its annual financial report within six months of the end of the fiscal year.
The drop in the number of A class companies has been attributed to growing mergers among financial institutions in recent times.
“The merging of a number of commercial banks and development banks last year led to the decline in the number of listed companies,” said Sambhu Pant, spokesperson of Nepse.
Moreover, a drop in profits of Grand Bank, which is in the process of merging with Prabhu Bank, has also played a role in the shortened list of A class companies. “In addition, Unilever Nepal has been excluded from the list for failing to submit its financial report on time,” said Pant.
Out of the 237 listed companies, development banks form the largest group in the elite list with 46. Similarly, 25 commercial banks, 23 finance companies, 15 insurance companies, three hydropower companies and one each from the hotels and other groups have made it into the A list.
Narendra Raj Sijapati, president of the Nepal Stockbrokers’ Association, said the ranking process was a positive practice. “Though it is not complete, it is satisfactory to assess the performance of the listed companies in the secondary market,” he added.
According to stockbrokers, most potential investors consider investing in A class companies. Sijapati said they felt confident buying shares in these companies. “About 70 percent of the investment have been made in such companies.”
Nepse has been honouring selected companies by putting them in the A list annually since 1996-97.
source: the kathmandu post,19 feb 2015LINK
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