What is NI 31?

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

What are the companies listed in NI 31?

There is no definitive list of companies comprising the NI 31 as it is not an official benchmark. The companies listed in NI31 are selected based on strong fundamental value based ratings.

How is NI 31 calculated?

NI 31 is calculated by multiplying NI 31 value and Average Price Relative of 31 stocks.

Example:
The index start point is taken as 2572.26 as of March 27, 2022 i.e. NI 31 value of 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.

Companies listed in NI 31 as of now

  • Nabil Bank Limited
  • NIC Asia Bank Limited
  • Siddhartha Bank Limited
  • Sanima Bank Limited
  • Prime Commercial Bank Limited
  • Sanima Mai Hydropower Limited
  • Arun Kabeli Power Limited
  • Ru Ru Jalbidhyut Pariyojana Limited
  • Butwal Power Company Limited
  • Chilime Hydropower Company Limited
  • Salt Trading Corporation
  • Muktinath Bikas Bank Limited
  • Garima Bikas Bank Limited
  • Nepal Life Insurance Company Limited
  • National Life Insurance Company Limited
  • Asian Life Insurance Company Limited
  • Oriental Hotels Limited
  • Manjushree Finance Limited
  • ICFC Finance Limited
  • Shikhar Insurance Company Limited
  • Neco Insurance Company Limited
  • Premier Insurance Company (Nepal) Limited
  • Citizen Investment Trust
  • Himalayan Distillery Limited
  • Shivam Cements Limited
  • 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
  • Nepal Doorsanchar Company Limited

Frequently Asked Questions (FAQs)

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 parameters like asset size, earnings, growth, health etc and 20% of Sharpe Ratio of the last 2 years of the stocks. Those companies who give the higher rank are selected from the particular indices as per allocation.

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 give sharp reduction in risk whereas going from 31-50 stocks will give very little reduction in risk and going from 50 above will give zero reduction in risk.

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 an annual basis based on the fundamental indicator and ranking basis. Also, whenever the company transaction is halted due to merger and acquisition then the next company preceding such company will be chosen according to the parameters.

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