NEF Current NAV : 9.60 as on 2022-11-25
NBF2 Current NAV : 9.58 as on 2022-11-25
NBF3 Current NAV : 8.31 as on 2022-11-25
FAQ

NI 31

The NI 31 refers to price relative value of the thirty-one most popular fundamental stocks traded on Nepal Stock Exchange.

There was no definitive list of companies comprising the NI 31, as it is not an official benchmark. The companies typically shared these characteristics; strong balance sheets, consistent growth. List of companies on NI 31 are:
COMMERCIAL BANK

  • Nabil Bank Limited
  • Nic Asia Bank Limited
  • Siddhartha Bank Limited
  • Sanima Bank Limited
  • Prime Commercial Bank Limited

DEVELOPMENT BANK

  • Muktinath Bikas Bank Limited
  • Garima Bikas Bank Limited

FINANCE

  • Manjushree Finance Limited
  • ICFC Finance Limited

HOTEL & TOURISM

  • Oriental Hotels Limited

HYDROPOWER

  • Sanima Mai Hydropwer Limited
  • Arun Kabeli Power Limited
  • Ru Ru Jalbidhyut Pariyojana Limited
  • Butwal Power Company Limited
  • Chilime Hydropower Company Limited

LIFE INSURANCE

  • Surya Life Insurance Company limited
  • National Life Insurance Company Limited
  • Asian Life Insurance Company Limited

NON LIFE INSURANCE

  • Shikhar Insurance Company Limited
  • Neco Insurance Company Limited
  • Premier Insurance Company (Nepal) Limited

MICROFINANCE

  • Nic Asia Laghubitta Bittiya Sanstha Limited
  • National Microfinance Bittiya Sanstha Limited
  • Deprosc Laghubitta Bittiya Sanstha Limited
  • Chhimek Laghubitta Bittiya Sanstha Limited
  • Global IME Laghubitta Bittiya Sanstha Limited

TRADING

  • Salt Trading Corporation

OTHERS

  • Nepal Doorsanchar Company Limited

MANUFACTURING AND PROCESSING

  • Himalayan Distillery Limited
  • Shivam Cements Limited

INVESTMENT

  • Citizen Investment Trust
S.N Sector Count Wt 31*Wt Market Cap Count Wt 31*WT Average No of Stocks
1 Commercial Banks 23 11.73% 3.64 1,147,870.10 32.22% 9.99 6.81 5
2 Development Banks 16 8.16% 2.53 172,955.09 4.86% 1.51 2.02 2
3 Finance 15 7.65% 2.37 68,800.89 1.93% 0.60 1.49 2
4 Hotels and Tourism 4 2.04% 0.63 54,098.06 1.52% 0.47 0.55 1
5 Hydro Power 45 22.96% 7.12% 389,349.81 10.93% 3.39 5.25 5
6 Investment 6 3.06% 0.95 274,297.43 7.70% 2.39 1.67 1
7 Life Insurance 12 6.12% 1.90 323,008.12 9.07% 2.81 2.35 3
8 Manufacturing And Processing 6 3.06% 0.95 150,939.61 4.24% 1.31 1.13 2
9 Microfinance 47 23.98% 7.43 363,415.82 10.20% 3.16 5.30 5
10 Non Life Insurance 18 9.18% 2.85 235,300.16 6.61% 2.05 2.45 3
11 Others 2 1.02% 0.32 367,369.00 10.31% 3.20 1.76 1
12 Trading 2 1.02% 0.32 14,782.62 0.41% 0.13 0.22 1
196 3,562,186.71 31
Allocation
BFI 14 45.16%
Insurance 6 19.35%
Investment 1 36.26%
Real Sector 10 32.26%
31 100.00%

The companies are selected based on Rank. The rank is calculated based on 80% of Average Rank of Q1 to Q4 of all the stocks from different parameter like asset size, earnings, growth,health etc and 20% of Sharpe Ratio of last 2 years of the stocks. Those company who gives the higher
rank is selected from the particular indices as per allocation.
For Example
5 Socks to be selected from commercial bank as per allocation.

S.NNameSymbolSectorAverage RankSharpe RatioWt
1Nabil Bank LimitedNABILCommercial Bank3.191.322.81
2NIC Asia Bank Ltd.NICACommercial Bank3.110.782.65
3Siddhartha Bank LimitedSBLCommercial Bank2.770.762.37
4Sanima Bank LimitedSANIMACommercial Bank2.840.272.33
5Prime Commercial Bank Ltd.PCBLCommercial Bank2.720.612.30
6Agricultural Development Bank LimitedADBLCommercial Bank2.620.522.20
7Global IME Bank LimitedGBIMECommercial Bank2.470.642.11
8Nepal Bank LimitedNBLCommercial Bank2.410.782.08

The above first 5 stocks are selected from commercial bank sub-indices because it has highest rank from the commercial bank sub-indices.

They reflect the changing expectation of the stock market about future dividends of Nepal’s corporate sector. When the NI 31 goes up, it is because the stock market thinks that the prospective dividends in the future will be better than previously thought. When prospects of dividends in the future become pessimistic, the NI 31 drops.
It is easy to create a portfolio, which will reliably get the same returns as the index. I.e If the index goes up by 2%, this portfolio will also go up by 2% and vice versa.
It is important because putting more stocks into an index yields more diversification. However, going from 10-30 stocks will gives sharp reduction in risk whereas going from 31-50 stocks will gives very little reduction in risk and going from 50 above will gives zero reduction in risk.

The NI 31 is calculated by multiplying NI 31 value and Average Price Relative of 31 stocks. The index start point is taken as 2572.26 as on March 27, 2022.
Example
NI 31 value as on March 27 is 2572.26
Average Price Relative of 31 Stocks as on March 28, 2022 is 0.9851
NI 31 value as on March 28, 2022 end =2572.26*0.9851=2533.93.

Basically the NI 31 is price relative value. So the price adjustment after dividend and right is adjusted during calculation of Average Price Relative of 31 stocks.

The NI 31 is rebalanced on annual basis based on the fundamental indicator and ranking basis. Also, Whenever the company transaction is halt due to merger and acquisition then the next company preceding such company will be chosen according to the parameters.