KATHMANDU, MAY 07 - 2013
The Security Board of Nepal (Sebon) on Monday said its recent decision to allow conversion of promoters’ shares into public shares will not create an influx of shares into the secondary market.
The Sebon recently allowed promoters of bank and financial institutions (BFIs) to sell 19 percent of their promoters’ shares to the public through stockbrokers. The decision followed the Nepal Rastra Bank’s (NRB) permission to BFI promoters to sell their promoters’ shares so as to reduce their holding to 51 percent. Presently, promoters hold 70 percent in almost all BFIs.
Earlier, promoters had to go through offer letter and other procedures of public share issuances to sell promoters’ shares .
Investors feared that the Sebon’s decision would result in oversupply of shares , hitting the secondary market hard. The degree of investors’ scepticism can be gauged by the fact that the Nepal Stock Exchange (Nepse) index dipped below 500 points last week for the first time in six months.
Sebon Chairman Babu Ram Shrestha said the new provision will not affect the market as the entire BFI promoters will not come to the market at once to sell their shares . “As the promoters are also investors, they will hold their shares for speculative purpose to benefit from the transaction,” he said.
Meanwhile, the Sebon has recommended to the government to exempt the capital gain tax on transactions up to Rs 50,000, according to Shrestha. Currently, the government imposes 10 percent capital gain tax on share transactions. “We are also preparing to bring more real sectors to the market which is dominated by the financial institutions,” he said.
Similarly, the Sebon granted permission to five mutual funds in the first nine months of the fiscal year. Of them, Siddhartha Mutual Fund and Nabil Mutual Fund have already started operations. “Encouraging participation of investors in mutual funds indicates peoples’ growing attraction towards the capital market,” said Sebon Director Niraj Giri.
Also, Sebon granted permission to 19 companies to issue initial public offerings (IPO) and two companies to issue rights shares worth Rs 148 million as of the third quarter. Forty-five companies were allowed to issue bonus shares worth over Rs 3.30 billion.
Source: The Kathmandu Post
The Security Board of Nepal (Sebon) on Monday said its recent decision to allow conversion of promoters’ shares into public shares will not create an influx of shares into the secondary market.
The Sebon recently allowed promoters of bank and financial institutions (BFIs) to sell 19 percent of their promoters’ shares to the public through stockbrokers. The decision followed the Nepal Rastra Bank’s (NRB) permission to BFI promoters to sell their promoters’ shares so as to reduce their holding to 51 percent. Presently, promoters hold 70 percent in almost all BFIs.
Earlier, promoters had to go through offer letter and other procedures of public share issuances to sell promoters’ shares .
Investors feared that the Sebon’s decision would result in oversupply of shares , hitting the secondary market hard. The degree of investors’ scepticism can be gauged by the fact that the Nepal Stock Exchange (Nepse) index dipped below 500 points last week for the first time in six months.
Sebon Chairman Babu Ram Shrestha said the new provision will not affect the market as the entire BFI promoters will not come to the market at once to sell their shares . “As the promoters are also investors, they will hold their shares for speculative purpose to benefit from the transaction,” he said.
Meanwhile, the Sebon has recommended to the government to exempt the capital gain tax on transactions up to Rs 50,000, according to Shrestha. Currently, the government imposes 10 percent capital gain tax on share transactions. “We are also preparing to bring more real sectors to the market which is dominated by the financial institutions,” he said.
Similarly, the Sebon granted permission to five mutual funds in the first nine months of the fiscal year. Of them, Siddhartha Mutual Fund and Nabil Mutual Fund have already started operations. “Encouraging participation of investors in mutual funds indicates peoples’ growing attraction towards the capital market,” said Sebon Director Niraj Giri.
Also, Sebon granted permission to 19 companies to issue initial public offerings (IPO) and two companies to issue rights shares worth Rs 148 million as of the third quarter. Forty-five companies were allowed to issue bonus shares worth over Rs 3.30 billion.
Source: The Kathmandu Post
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