Bank wont increase
Market of 2069/70/71 should be seen (before capital increment)
Banks prices in nepse remained fairly stable without significant flux
It was capital increment that triggered their prices very high
And Now capital has been increased so much that banks have over supply of shares
Also Banks wont run at full capacity (80% CD Ratio) now as its lending will decline due to tight compliance setups directed by NRB
Hence subprime lendings will cease and this will bring commercial banks profits to normal levels from current abnormal levels
This will push interest rate down further in coming days
Further if Government Spending improves even by little, it will bring loads of cash into system easing liquidity significantly and pushing interest rate down
Hence cycle of balance will be maintained in coming days and Nepal needs lower interest rates for economy expansion
On the other hand
If we see market of 2069/70/71 we see MFI had high prices
Because during 2069/70/71, INTEREST RATE LEVEL WAS LOW and Cost of fund for MFI was low and their profit was high
Now as interest rate level falls, again their cost of fund will be low and profit will be high
Hence past trend and current falls in interest rate level will trigger MFI Prices Up
Also MFI shall increase their capital now
All national level will have 2 arab capital
Doesnt matter whether NRB makes it compulsory, as MFI themselves are increasing (See their balancesheet and see their authorized capital or AGM Agendas)
Second quarter report and half a dozen of MFI will hit circuits further
Second Quarter report will be crucial
Second quarter report gives true and fair picture of business
First quarter reports undergoes many adjustments and doesnt give true and fair picture
Hence, Undervalued Banks for Long Term
Hence, Undervalued MFI for Medium Term
Hence, Reasonably Valued Shares for Short Term
....Baki Ishwor Ko Leela....
« Last edit by
पूजीभैरव on Fri Jan 10, 2020 7:01 am. »