KATHMANDU: Dec 12, 2013
About two and a half dozen financial institutions are scrambling to conduct their annual general meetings (AGM) in the next one month to meet the regulator’s fixed deadline.
About 31 financial institutions — commercial banks, development banks and finance companies — will be holding their AGMs between early December and early January. Moreover, during this period share investors are particularly flush with cash as the AGMs of the financial institutions give a final approval for the dividend distribution.
Nepal Rastra Bank (NRB)’s — financial sector regulator — regulations require financial institutions to conduct their AGM within five months of the completion of the fiscal year. However, if they place a request for extension of the deadline, the central bank allows them three more months.
Among the 181 listed financial institutions, so far, 37 financial institutions have held their AGMs and even completed dividend distribution. Likewise, of the ones that will be conducting their AGMs within the first week of January, 22 financial institutions have already closed the books in preparation for their AGMs.
After the book closure, buyers of shares of the particular company are not eligible to get the distributed dividend. For that very reason, prices of ordinary shares of Nabil Bank and also its promoter shares plunged by Rs 460 and Rs 275 per unit, respectively, as the bank’s share buyers from today will not be entitled to the announced 65 per cent dividend.
“The amount of shares traded goes up around the book closure date as investors who invest for dividends are pretty much active around this time, and also they do not hesitate to bid higher prices if the dividend can cover it,” according to president of Nepal Investors Forum
Raj Kumar Timilsina.
“However, in the present scenario, when share trading is providing higher returns, investors are not scrambling for dividends, yet stock dividend is highly desirable,” he added.
Along with approving dividend, during AGMs, shareholders can exercise their right to also elect a new board of directors and get to know the financial health of the company they have invested in. For public companies, an AGM is the perfect platform for minority stakeholders to voice their opinions regarding the company’s decisions and workings.
But unfortunately, most of the listed companies are not punctual in conducting the annual event on time. The capital market regulator, Securities Board of Nepal’s regulation requires listed companies to hold their AGM within six months of the completion of the fiscal year. However, only half of the listed companies undertake it on time.
Except for financial institutions, three hydropower companies, one hotel and five manufacturing companies have held their AGM for the current fiscal year.
The late AGM means shareholders do not get adequate information regarding the companies they have invested in on time. The stale information and statistics are of no use to investors in investment related decision making.
About two and a half dozen financial institutions are scrambling to conduct their annual general meetings (AGM) in the next one month to meet the regulator’s fixed deadline.
About 31 financial institutions — commercial banks, development banks and finance companies — will be holding their AGMs between early December and early January. Moreover, during this period share investors are particularly flush with cash as the AGMs of the financial institutions give a final approval for the dividend distribution.
Nepal Rastra Bank (NRB)’s — financial sector regulator — regulations require financial institutions to conduct their AGM within five months of the completion of the fiscal year. However, if they place a request for extension of the deadline, the central bank allows them three more months.
Among the 181 listed financial institutions, so far, 37 financial institutions have held their AGMs and even completed dividend distribution. Likewise, of the ones that will be conducting their AGMs within the first week of January, 22 financial institutions have already closed the books in preparation for their AGMs.
After the book closure, buyers of shares of the particular company are not eligible to get the distributed dividend. For that very reason, prices of ordinary shares of Nabil Bank and also its promoter shares plunged by Rs 460 and Rs 275 per unit, respectively, as the bank’s share buyers from today will not be entitled to the announced 65 per cent dividend.
“The amount of shares traded goes up around the book closure date as investors who invest for dividends are pretty much active around this time, and also they do not hesitate to bid higher prices if the dividend can cover it,” according to president of Nepal Investors Forum
Raj Kumar Timilsina.
“However, in the present scenario, when share trading is providing higher returns, investors are not scrambling for dividends, yet stock dividend is highly desirable,” he added.
Along with approving dividend, during AGMs, shareholders can exercise their right to also elect a new board of directors and get to know the financial health of the company they have invested in. For public companies, an AGM is the perfect platform for minority stakeholders to voice their opinions regarding the company’s decisions and workings.
But unfortunately, most of the listed companies are not punctual in conducting the annual event on time. The capital market regulator, Securities Board of Nepal’s regulation requires listed companies to hold their AGM within six months of the completion of the fiscal year. However, only half of the listed companies undertake it on time.
Except for financial institutions, three hydropower companies, one hotel and five manufacturing companies have held their AGM for the current fiscal year.
The late AGM means shareholders do not get adequate information regarding the companies they have invested in on time. The stale information and statistics are of no use to investors in investment related decision making.
Source: THT
2 comments:
Meanwhile in Australia, the dollars keep decreasing its value.
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