Why is Nepal Bangladesh Bank Ltd is rapidly rising in nepal stock market ?

The share price of Nepal Bangladesh Bank Limited is rising at an astounding rate in the stock market – faster than most other scrips of listed companies.

What could be the reasons behind it?

Even the experts seem a bit perplexed by the almost meteoric rise in the price of NBB shares.

“I am at my wit’s end,” says Ramesh Agrawal, one of the leading share investors. “The way the share price of this bank is rising is behind my comprehension. In fact, I can’t understand the surge in the price of shares of many listed companies.”

He went on to hint that the imminent second installment from ICFC Bank of Bangladesh, which would effectively hand over the commercial bank to new management, reforms in the bank management, auction of the promoter and rights shares held by the founder promoter, NB Group, which had put the bank in the mess in past, could be other factors, besides the ongoing bullish trend of the market itself.

He further said that it’s high time the market went for correction, and not just the share prices of this particular commercial bank.
Bharat Ranabhat, the Managing Director of Kohinoor Securities (broker number 35) cited the same reasons for the surging price of NBB’s shares.

“Moreover, the market sentiment is such that there is always a seller for anyone who wants to sell the share of a listed company, and NBB shares are among the hot cakes at this point,” Ranabhat further said.

Yet another reason he cited for the demand of NBB Bank shares is that the commercial bank is already good, fundamentally too.

The unaudited first quarterly report for NBB shows that it earned a net profit of Rs 14.16 crore in the first quarter, up from Rs 6.12 crore in the corresponding quarter of the last fiscal year.

The bank also posted an impressive net interest income of Rs 19.45 crore, down from just Rs 9.04 crore in the corresponding quarter.

Its non performing loan has also significantly decreased from 3.95 percent to just 1.40 percent.

‘Second installment soon’

Meanwhile, NBB officials have told that the second installment from ICFC Bank will come “soon”.

“We are waiting for the final letter from Nepal Rastra Bank at this point,” said Dhiraj Raj Subedi, bank’s company secretary. “Once it is done, ICFC will be releasing the second installment.”

He, however, said that though the second installment will come soon, it will take months before the new management can takeover.

“They are yet to initiate the process of seeking permission from the authorities concerned for the management change,” he said. “It will take several months to complete that process once it is begun.”-SSN