Initial Impact of Big Merger Seen in Secondary Market

Jul 07, 2019 03:03 PM Merolagani

Indication of forceful big merger through the upcoming Monetary Policy by Nepal Rastra Bank (NRB) has gradually shown its impact in the secondary market.

Although the wave is yet to reach the big commercial banks, small commercial banks with low share price are experiencing big fluctuation in the market.

Particularly, investors are queuing up to purchase thousands of cheap commercial bank shares that have formed a merger committee and held meetings with few counterparts.  Meanwhile, there is notable selling pressure on those stocks as well.

The current scenario shows an inclination of short term investors in shares of those banks that are most probably going for merger/acquisition.

As NRB build pressure among commercial banks for the merger, addressing it in Monetary Policy (hopefully), the investors are also expecting good swap ratio upon merger/acquire of the small commercial bank by a big commercial bank. It is also encouraging long term investors to book cheap shares.

Mainly, the market is experiencing deep selling and buying pressure on shares of Civil Bank, Mega Bank, Century Bank, Laxmi Bank and Kumari Bank.

Mega Bank with a price of Rs 212 on July 7 has buying order for 300,000 units while selling order of 67,500. Similarly, Civil  Bank with a price of Rs 159 has a buying order of 136,000 and selling order of 74,000.

Likewise, Kumari Bank with a price of Rs 223 has a buying order of 51,500 and selling order of 39,000 units of shares. Century Bank with a price of Rs 181 has a buying order of 54,000 and selling order of 62,000. Laxmi Bank with a price of Rs 230 has buying order for 35,000 and selling order for 26,500.

Additionally, investors are also keen on the shares of Nepal Bank expecting dividend in the current FY. Moreover, they are also hoping that the forceful merger will be implemented in three government banks as well. 

On Sunday, the share price of Nepal Bank has remained at Rs 229 and has buying and selling order of 76,000 and 72,000 units of shares respectively.

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