August 30, 2021 | Investopaper
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 or market value) 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.
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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 already met the minimum paid-up requirement of Rs 8 Arba.
As we know, in order to compute the market capitalization of a company, we should know the current market price and the total listed shares of the company. In case of commercial banks of Nepal, the number of shares equals to the paid-up capital of the bank divided by the face value i.e 100.
Number Of Listed Shares Of Commercial Banks In Nepal
The table below shows the number of listed shares of the commercial banks in Nepal.
|S.No.||Bank Name||Total Listed Shares (in crores)|
|1||Global IME Bank Ltd.||21.63|
|2||NMB Bank Ltd.||16.32|
|3||Nepal Investment Bank Ltd.||16.25|
|4||Prime Commercial Bank Ltd.||16.08|
|5||Mega Bank Nepal Ltd.||14.65|
|6||Kumari Bank Ltd.||13.87|
|7||Nabil Bank Ltd.||13.84|
|8||Nepal Bank Ltd.||12.63|
|9||Citizens Bank International Ltd.||11.66|
|10||NIC Asia Bank Ltd.||11.56|
|11||Prabhu Bank Ltd.||11.34|
|12||Agriculture Development Bank Ltd.||10.98|
|13||Siddhartha Bank Ltd.||10.96|
|14||Laxmi Bank Ltd.||10.69|
|15||Himalayan Bank Ltd.||10.68|
|16||Nepal Credit and Commerce Bank Ltd.||10.31|
|17||Rastriya Banijya Bank Ltd.||10.18|
|18||Sanima Bank Ltd.||9.68|
|19||Bank of Kathmandu Ltd.||9.65|
|20||Nepal SBI Bank Ltd.||9.49|
|21||Sunrise Bank Ltd.||9.48|
|22||Machhapuchchhre Bank Ltd.||9.05|
|23||Century Commercial Bank Ltd.||9.03|
|24||Nepal Bangladesh Bank Ltd.||9|
|25||Everest Bank Ltd.||8.89|
|26||Civil Bank Ltd.||8.64|
|27||Standard Chartered Bank Nepal Ltd.||8.57|
Note: The total listed shares of the commercial banks is of Mid-July 2021 [Ashad end, 2078 BS]
Market Capitalization Of Commercial Banks In Nepal
The table below presents the commercial banks along with the share price, listed shares and the market capitalization.
|S.No.||Bank Name||Total Listed Shares (in crores)||Market Price Per Share (Rs.)||Market Capitalization (Rs ‘In Arba’)|
|1||Nabil Bank Ltd.||13.84||1433||198.39|
|2||NIC Asia Bank Ltd.||11.56||920||106.38|
|3||Global IME Bank Ltd.||21.63||447.9||96.89|
|4||Prime Commercial Bank Ltd.||16.08||506||81.38|
|5||Nepal Investment Bank Ltd.||16.25||460||74.78|
|6||NMB Bank Ltd.||16.32||449||73.3|
|7||Everest Bank Ltd.||8.89||739||65.72|
|8||Nepal Bank Ltd.||12.63||517||65.33|
|9||Agriculture Development Bank Ltd.||10.98||559||61.43|
|10||Siddhartha Bank Ltd.||10.96||519||56.89|
|11||Mega Bank Nepal Ltd.||14.65||362||53.05|
|12||Himalayan Bank Ltd.||10.68||484||51.71|
|13||Prabhu Bank Ltd.||11.34||447.1||50.73|
|14||Kumari Bank Ltd.||13.87||362||50.24|
|15||Sanima Bank Ltd.||9.68||518||50.15|
|16||Standard Chartered Bank Nepal Ltd.||8.57||565.2||48.45|
|17||Citizens Bank International Ltd.||11.66||401||46.76|
|18||Nepal Bangladesh Bank Ltd.||9||456||41.06|
|19||Laxmi Bank Ltd.||10.69||380||40.64|
|20||Nepal SBI Bank Ltd.||9.49||390||37.02|
|21||Machhapuchchhre Bank Ltd.||9.05||406||36.75|
|22||Bank of Kathmandu Ltd.||9.65||376||36.31|
|23||Nepal Credit and Commerce Bank Ltd.||10.31||348||35.89|
|24||Sunrise Bank Ltd.||9.48||359.9||34.14|
|25||Century Commercial Bank Ltd.||9.03||272||24.57|
|26||Civil Bank Ltd.||8.64||273||23.59|
|27||Rastriya Banijya Bank Ltd.||10.18||–||–|
The share price is of August 29, 2021 [Bhadra 13, 2078 BS]. The total listed shares of the banks is of Mid-July 2021 [Ashad end, 2078 BS].
Since, Rastriya Banijya Bank (RBB) is not listed and traded in Nepal Stock Exchange, there is no market price of RBB. Hence, we have not computed the market capitalization of Rastriya Banijya Bank.
Related: Current Status of Banking in Nepal
From the above table, we can conclude that Nabil Bank is the top bank of Nepal in terms of market capitalization. Also the leader of the banking sector of Nepal, Nabil Bank has a market value of Rs 198.39 Arba (As of Bhadra 13, 2078 BS). It is followed by NIC Asia Bank with Rs 106.38 Arba market capitalization. Similarly, Civil Bank has the lowest market value among the commercial banks with Rs 23.59 Arba.
The average market cap of the commercial banks in Nepal is Rs 59.29 Arba.
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