Nepal Stock News: Bearish Market Effect - Mutual Funds NAV Decline !

The financial reports of the mutual funds operating in the market are also been affected by the bearish trend in the country's sole stock market. Out of the 12 mutual funds operating in the market till mid-March, Net Asset Value (NAV) of 5 mutual fund schemes has declined below Rs 10 while NAV of 7 mutual funds is above Rs 10.

Based on the market price of March 28, the market prices of 7 mutual funds have decreased below the issued price of Rs 10. The market price of only 5 mutual funds is above Rs 10.

By mid-March, NAV of NIBL Pragati Fund, Nabil Equity Fund, Laxmi Equity Fund and Global IME Summunat Scheme 1 have decreased below Rs 9. Siddhartha Equity Fund has NAV of below Rs 10. Similarly, NAV of NMB Hybrid Fund L1 and Laxmi Value Fund 1 are between Rs 10-Rs 11.

Siddhartha Equity Oriented Scheme and NIBL Samriddhi fund 1 has NAV of Rs 11.56 and 11.59 respectively. Likewise, NMB Sulav Investment Fund 1 has NAV of Rs 13.17 and Nabil Balanced Fund 1 has the highest NAV of Rs 17.80.

An opportunity waiting to be grabbed in the bearish market

Given that the market price of 7 out of 12 mutual funds is below the face value, investors can make profits by investing in the secondary market than in the primary market.

The schemes issued their mutual funds units at Rs 10 however; the units have decreased below the face value. The market price of Laxmi Equity Fund has decreased to Rs 9 while the market price of Nabil Balance Fund is at Rs 16.

The market price of Laxmi Equity Fund, NIBL Pragati Fund, Siddhartha Equity Fund, NMB Hybrid fund L1, Sanima Equity Fund and Global IME Sammunat Scheme 1 has decreased below Rs 10.

Similarly, the market price of NIBL Samriddhi Fund 1, Laxmi Value Fund 1, Siddhartha Equity Oriented Scheme, NMB Sulav Investment Fund 1 AND Nabil Balance Fund is above Rs 10.

As per the financial report published on mid-March, the schemes have invested on fixed deposits. The accumulated capacity of the 12 funds stands at Rs 12.05 billion.

Citizens Mutual Fund 1 and NIC Asia Growth Scheme 1 have been excluded from the analysis.

Funds still hold Rs 4 billion bank balance

As per the financial reports, the 12 mutual funds still hold a balance of Rs 4.38 billion with them. The funds that were started with a primary focus on stock investment, however, are not utilizing their full capacity.

As per the report, Siddhartha Equity has the highest balance of Rs 1.15 billion till mid-March. NIBl Pragati Fund has the lowest balance of Rs 38.8 million.