Banking stocks account to 52.52 percent of the total market capitalization of the Nepalese stock market.
The market capitalization of a company refers to the total market value of the outstanding shares of that company. So, basically the market capitalization ( also known as market cap) of a company is obtained by multiplying the market price per share to the number of outstanding shares of that company. This calculation will help you to determine the size and the strength of the company in the market.
Market capitalization can be helpful to diversify your portfolio because it is essential to pick different sized companies to minimize the risk associated with your investment. One of the basic features of blue-chip stocks is large market capitalization. On the other hand, the company with small market capitalization can become the most valuable companies in your portfolio if they become successful. But they have a high risk compared to large-cap companies.
Market cap is also a useful metric to determine the changing position of a company in the stock market either it be large, medium or small companies. Likewise, it also reflects the overall market behavior and sentiment too. For instance, when the total market cap of a Nepalese stock market increases on a daily basis for a time period, it is understandable that the market is on an upward trend and vice versa.
In the context of Nepal, the banking sector is one of the most preferred sectors for investment in the stock market. One of the reasons behind it is definitely the size of the company. All 27 banks have now met the minimum paid-up requirement of 8 Arab. The table below shows the list of the 27 commercial banks along with the market capitalization.
MARKET CAPITALIZATION OF 27 COMMERCIAL BANKS AS OF AUGUST 29, 2019 (RANKING WISE)
|Rank||BANKS||NO. OF LISTED SHARES||MARKET PRICE (Rs.)||MARKET CAP (In Arba)|
|2||Nepal Investment Bank||127,697,488.00||464||59.25|
|4||Standard Chartered Bank||80,114,306.00||625||50.07|
|6||NIC Asia Bank||88,342,287.00||439||38.78|
|7||Agricultural Development Bank||90,155,288.00||426||38.41|
|8||Nepal SBI Bank||84,492,504.00||445||37.60|
|10||Global IME Bank||103,105,160.00||295||30.42|
|14||Prime Commercial Bank||93,186,264.00||275||25.63|
|18||Bank of Kathmandu||80,631,016.00||253||20.40|
|23||Janata Bank Nepal||80,007,858.00||214||17.12|
|24||Nepal Bangladesh Bank||80,921,476.00||211||17.07|
|26||Century Commercial Bank||84,154,720.00||158||13.30|
To know about the performance of the 27 commercial banks of Nepal in the fiscal year 2075/76, click the link below: