Senior officials from both the banks have also confirmed that Prabhu is buying both promoter as well as ordinary shares of Kist in an apparent bid to facilitate the merger.
“Kist Bank and Prabhu Bikash Bank are working on a merger,” the source privy of the development told ShareSansar today. “It might, however, take some time before they sign the deal.”
But he was quick to add that Prabhu has not discontinued the talks for merger and has also been buying shares of Kist “not just for to diversify its investment portfolio but also with an eye for the possible merger”.
Officiating Chief Executive Officer of Kist Bank, Bhesh Raj Khatiwada, however, said that they were not seeking merger with Prabhu at this point.
But CEO Khatiwada admitted that they have been noticing that Prabhu was buying Kist Bank’s shares since the resumption of its shares trading since December 9 after a hiatus of nine months.
Trading of the shares of Kist Bank was suspended by the NEPSE after Kist signed a Memorandum of Understanding with Vibor Bikas Bank for the merger of the two BFIs back on March 21.
However, seven months after the MoU, both the BFIs decided to pull out of the merger process due to some internal reasons, particularly the resignation of Kamal Gyawali, the then Managing Director of Kist Bank, owing to some loan scam related to his spouse.
Kist share likely to reach Rs 250 by next week
Meanwhile, the price of Kist Bank shares has been rising steadily after the trading of its scrip resumed, and those who are closing following the movement says that the price of Kist Bank’s unit share will hover around Rs 250 by the next week, most probably by the time the trading closes on Monday.
A unit share of Kist Bank, which was priced at Rs 137 when its trading resumed on December 9, hovers around 180 now.
Ambika Prasad Paudel of Hathway Investment, a leading institutional investor, believes that the Kist Bank’s share price will continue to rise in days to come due to several reasons.
Asked how much could the price of Kist Bank shares go up and by when, Paudel said that it is likely to hover around Rs 191 when the market closes tomorrow .
He said that this trend should continue till Monday next week.
“Despite the loan scam of the past, the central bank has clarified that Kist Bank is in good financial condition,” he said. “We should also not forget that it was Kist, which wanted to pull out of the merger with Vibor to look for a better merger deal with other BFIs.”
“Another reason Kist Bank’s scrip will continue to rise is the sheer demand for its shares and the volume of the transaction,” he added. “There is no way the surge in Kist Bank share price will slow down before next week."
On the first day alone, no other listed companies traded as much as the bank – altogether 4 lakh 10 thousand 470 unit shares of the bank were traded through 11 transactions for Rs 6.12 crore.
Individual share investor Jeevan Shrestha also said that going by the pattern of Kist Bank’s share price in the market, it should hovering around Rs 200 per unit by the end of the day and continue to rise in the same trend for the next few days.
Shrestha, too, projects that the Kist Bank’s share should be priced between Rs 235 to Rs 250 by Monday.
Another reason the stakeholders cite for continual rise in the Kist Bank share price is that the shares of all the commercial banks were fairing well owing to conducive environment in the country.
-Sharesansar
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