Chilime Hydro Power Share Allotted

The much awaited Chilime Hydro Power public share has been allotted and you can view it online on the links below. All the best for the applicants.

Please see here for your allotted shares Chilime Share Allotment Page
and Nagarik Lagani Kosh(Citizen Investment Trust) the main underwriters of Chilime Shares.

If you have any questions please post in Comments.

Chilime IPO for general Public

The long awaited IPO of Chilime Hydro power is at last is out for public application with much higher price tag than most expected.

Minimum number of Shares to be applied = 30 Shares
Maximum number that can be applied = 1000 Shares
Total ordinary shares issued = 1344000 kitta

OPENING DATE---2068/2/17
CLOSING DATE---2068/2/20
PRICE PER KITTA--408.36 INCLUDING PREMIUM (which is 308.36 premium.)

Is this IPO good for general public to apply?

Seven banks and FIs apply to open MFIs

Seven banks and financial institutions (FIs) have applied to Nepal Rastra Bank (NRB) asking the latter to allow them to open micro-finance institutions (MFIs) as their subsidiary companies. The central bank had opened door for commercial banks, development banks and finance companies to establish MFIs as their subsidiary in last August by issuing a directive.
Currently, banks have been providing wholesale loans to independent MFIs to fulfill their obligation to lend 3 percent of their total lending to rural areas under deprived sector lending. Amongst the banks and financial institutions vying to establish MFIs are Everest Bank, Laxmi Bank, Nepal Investment Bank Limited (NIBL), Prime Commercial Bank, International Leasing and Finance Company, Muktinath Development Bank and Nepal Express Finance Company.
But, NIBL's chairman and chief executive director Prithvi Bahadur Pande said his bank would have only 20-25 shares in the proposed MFI. "We are willing to support the effort of a committed group of people to open the MFI investing a portion of share so that many Nepalese can have access to finance," he said.
They will have to manage paid up capital of Rs. 100 million to open a national level MFI, Rs.60 million for regional institution and Rs. 10 million for 1-3 district MFIs as per the licensing policy of the NRB. Laxmi bank said it's paid up capital for its subsidiary MFI will be Rs. 100 million, of which 30 percent will go for the public.
Laxmi's chief executive officer (CEO) Suman Joshi said they were planning to open MFI by the end of the current fiscal year if the central bank gives approval to their proposal within a week. "Our MFI will use the latest technologies to ease the process of delivering credit facilities to rural people," Joshi said.
The banks are vying for opening subsidiary MFIs when they are refraining from going to rural regions terming the rural banking costly. "We can hire staff by offering relatively low salary and use the effective management practice of bank in running the MFI to make MFI's operation cost effective," said Joshi.
According to him, Laxmi Bank has already been running micro-credit schemes in the districts including Kavrepalanchowk, Shyangja, Kaski, Chitwan and Jhapa. Similarly, Narendra Bajracharya, chairman of Prime Commercial Bank said his bank saw opportunity in opening MFI as it will be effective tool to channalise the loans that they have to make lending under deprived sector lending. "We can help rural economy to grow by directing going to rural people," he said. "Moreover, it may also be effective tool to bring the remittance to banking system."
According to him, the Prime has been working with the district development committees to use the fund under the deprived sector loans as well as has also made wholesale lending to existing MFIs. Meanwhile, the central bank on Monday opened door for MFIs to collect deposits from individuals too in addition to from those who are in a group formed by them to address the possible resource constraints to the independent MFIs as a result of banks and FIs investing in their own subsidiary MFIs.

Coming soon: ADBL shares worth Rs 960m

Agricultural Development Bank Limited (ADBL) will start issuing ordinary shares worth Rs. 960 million within the next two weeks as the Securities Board of Nepal (SEBON) is expected to grant its approval by Thursday.
It will be the largest ever initial public offering (IPO) in the country. The existing rule regarding issuance of securities has provisioned that a company should make its IPO within two months after receiving permission. Ace Development Bank is its issue manager. Ace chief executive officer Siddhant Raj Pandey said that he also got information about SEBON giving permission to ADBL to issue shares.
"We will inform the public about the procedure of share issuance within a week," he said. Issuance of ADBL public shares was delayed due to various procedural and legal complications. "Lately, we were delayed in giving permission as ADBL just submitted the unaudited financial report," said a SEBON source. "Now, we have got the audited report."
Earlier, the IPO was stalled as there was no merchant banker company able to underwrite ADBL's huge share issue. The underwriter should underwrite 50 percent of the shares. It means the underwriter should purchase undersubscribed shares. Nepal Rastra Bank later simplified the provision regarding underwriting by allowing Ace to underwrite the ADBL's shares. The ADBL is set to issue 30 percent of the total number of shares. The government's stake in the ADBL will remain at 55.86 percent after issuance of the shares. About two years ago, ADBL had issued 14.14 percent of the shares to its customers. SEBON had stopped listing of these shares on the stock exchange as they were not issued through the IPO process.
When the stock market has been heading downhill, ADBL is making the largest ever share issue. A stock analyst said that all the shares may not be sold due to the liquidity crisis in the banking system. But he said it may help bring excess liquidity in the market to the banking system. "The share subscription of City Development Bank was 27 times higher recently," Pandey said.

NEA to give NT 10% in Upper Tamakoshi

After a month-long disagreement over equity participation, Nepal Electricity Authority (NEA) has finally agreed to provide 10 percent equity shares to Nepal Telecom (NT) in the 456-MW Upper Tamakoshi hydroelectric project. The decision to this effect was taken at a meeting organized to brief Prime Minister Madhav Kumar Nepal on the project at Singha Durbar on Friday. During the briefing, the PM directed NEA to work toward the financial closure of the project. According to the sources present in the meeting, NEA had to give in to NT´s demand as Minister for Information and Communications Shankar Pokharel had directed NT not to invest in the project unless equity shares worth the investment were provided to it. He had cited poor management and over-politicization of NEA as reasons behind such a stand.
"NEA is willing to award up to 10 percent equity participation to Telecom as per its stance," an NEA official told myrepublica.com, adding, "The formal decision to this effect will be taken soon." Earlier, a joint task force comprising representatives from NT and NEA had decided that NT would invest Rs 6 billion as loan in installments for the project. This means, it will get 10 percent share worth Rs 600 million. The project expected to complete in four years, requires about Rs 33 billion. The project plans to have 30% of the cost as share investment and the remaining as a loan. NEA has also been urging Nepal Army to invest in the project from its Welfare Fund.

During the technical briefing, issues relating to the Pancheshwar High-dam and Saptakoshi High-dam were also taken up. "We conveyed to the PM the decision to go ahead with the survey of Saptakoshi dam," Minister for Energy, Dr Prakash Saran Mahat said, adding, "As India is very close to our agenda in Pancheshwar, we told PM that the government is pursuing the project with the Indian government." Capacity upgradation of the power houses in the country and power import from India were also discussed in the meeting, Dr Mahat informed. While India is giving only 20 MW from Tanakpur, Nepal has sought 70 MW extra imports to mitigate power crisis at home, he said. Nepal has sought to import additional 30 MW via Biratnagar, another 30 MW via Gandak corridor and 10 MW via Birgunj.

The PM was also briefed on the agenda of the tripartite cross-border transmission line talks between Nepal, India and the World Bank to be held on Sunday in Kathmandu. The PM was briefed by Dr Mahat, Director General of Department of Electricity Development, Shriranjan Lacoul and Sher Singh Bhat, Director of System Operation Department, NEA. Asked to comment, Bhat said, "The NEA´s tentative demand and supply of power for the winter was presented to the prime minister."

Hope This will bring better revenue and profit for NTC and its shareholders. (Please put your views).

CHCL to issue its share at Rs.600

Chilime Hydro Power Company ltd. has decided to issue its share at Rs.600 per share. The board meeting held on 22nd march, 2008 decided to add a premium of Rs.500 on the share with the paid up value of Rs.100 and issue at the rate of Rs.600 per share. Under the company act - the organization operating in profit for last 3 years, agreed upon issuing share in premium in the general meeting of the company and having net worth more than the paid up value has the authority to issue the share at premium. Referring to the same act, Chilime is about to issue the share to the general public at premium. The company was to issue the share to the general public before three years, yet not a single share is smelt to date. The company is issuing 23.4 million shares for the general public, but it is further partitioned. Out of which 1.8 million shares is offered to the local people of Rasuwa, where the chilime hydro power plant is operating, 500 shares to the local Parwatikunda secondary school, 11 thousand 5 hundred and 20 shares to the mutual fund and 10 thousand is kept in store. The remaining 21.19 million shares are to be distributed to the general public as an Initial Public offering (IPO), issue managers being NIDC capital market and Citizen Investment Trust (CIT).CHCL has decided to sell the shares to the secondary school at Rs.100 itself. It is still to be decided at what price the local rasuwalis are receiving the shares.

Sebon uncovers scam

Investors have been, for long, complaining of foul play in the capital market. But for the first time, Securities Board of Nepal (Sebon) has uncovered what appears to be a huge financial scam in the capital market that might be only the tip of an iceburg. "Sebon has stopped the allotment process of Employment Promotion and Development Bank's (EPDB) shares until its investigation completes. It has also written to Ace Development Bank, the issue manager of EPDB's Initial Public Offerings (IPOs), to stop the process of allotment," said Dr Chiranjivi Nepal, chairman of Sebon, the regulatory authority of the capital market. "After we got complaints of foul play in IPOs, we randomly checked the collection centres," he informed, adding that the inspection team then took control of the suspected forms. "Sebon inspection team has randomly taken control of a couple hundreds of forms that are being suspected of fraudulent," said P N Poudyal, director, Market Regulation Department of the Sebon. "Such forms will be cancelled which is necessary to clean up the market," said Neeraj Giri, director at the Sebon, without elaborating on what action the regulatory authority is going to take. The EPDB had received 5,00,000 applications amounting to over eight billion rupees that it claimed to be oversubscribed by 66 per cent. It had floated shares worth Rs 128 million for public. Such incidents call for an urgency of new IPO regulation that is in offing and is expected to control such foul play.

This shows how irresponsible and careless our government is. What is the right action for the government? Just eliminate those applications or keep those applications to get the information of knowing who is doing it and taking some legal actions?

Mistakes to avoid while investing

Investing is not just about picking winners, but also about avoiding mistakes. Retail investors/traders can be better off if they avoid making the following mistakes. Thou there can be different rules for different kind of investors these are fundamentally fit for all.

Overconfidence - Don't be unrealistically optimistic

A bull market makes retail investors believe that they are geniuses - after all, anything they put money into goes up. This overconfidence in their own abilities leads to a complete disregard of the risks involved. Every new generation that invests in the market ignores past experience. These new investors wrongly believe that stock prices only go up.

Don't be overconfident and don't start believing that you have superior skills compared to the market. Recognise that in a bull market you are benefiting because the whole market is going up. If those around you are getting unrealistically optimistic, start managing your risk accordingly. Remember that sometimes markets do come crashing down.

Over enthusiasm to trade - Not every ball should be hit

Good batsmen realise that some balls outside the off-stump should be left alone(okay now this is some cricket stuff if u don't know this game leave this and read futher). Similarly, professional investors realise that sometimes its better to just stand still than to rush into a stock. Retail investors often make the mistake of "flashing outside the off-stump" because they cannot resist the temptation to trade in every opportunity. And, like an inexperienced batsman, they suffer the same fate.

Too much trading will lead to a lot of churn, extra commissions to your broker and huge tax implications for you. Some of the world's best investors follow a buy and hold strategy - you should too.

Missing the benefits of compounding of capital - Learn from Einstein

Albert Einstein is reputed to have said that compounding of capital is the 8th wonder of the world because it allows for the systematic accumulation of wealth. Even though any one in class 5 could tell you how compounding works, retail investors ignore this basic concept. Compounding of capital can benefit you only if you leave your money uninterrupted for a long period of time. The sooner you start investing, the bigger the pool of capital you will end up with for your middle-aged and retirement years.

Don't wait to start investing only when you have a large amount of money to put to work. Start early, even if it's with a small amount. Watch this grow to a very large amount with the passage of time.

Worrying about the market - But there is no answer to your favourite question

Smart investors don't worry about the direction of the market - they worry about the business prospects of the companies whose stocks they own. Retail investors are obsessed with the question "Where do you think the market will go?" This is a wrong question to ask. In fact, no one knows the answer. The right question to ask is whether the company, whose stock you are buying, is going to be a much bigger business 10 years from now or not? Don't take a view on the market, take a view on long-term industry trends and how your chosen companies can create value by exploiting these trends.

Timing the market - Around 99% of investors will fail in this strategy

Its very difficult to time the market, i.e, be smart enough to buy at the absolute bottom and sell at the absolute top. Professionals understand that timing the market is a wasted exercise. Retail investors always wait for that elusive best opportunity to get in or to get out. But by waiting they let great investment opportunities go by. You should use systematic or regular investment plans to make investments. You'll have to make fewer decisions and yet can accumulate substantial wealth over time.

Selling in times of panic - You should be doing the opposite

The best opportunity to buy is when the markets are falling and there is fear in the minds of investors. Yet, many retail investors do exactly the opposite. They sell when the markets are falling and buy only when the markets are high. This way they end up losing twice - by selling low and buying high, when they should be doing exactly the opposite. If nothing has changed about the long-term outlook for the company that you own, then you should not sell this company's stock. Use this opportunity to buy more of the same stock in falling markets. Some of the world's biggest fortunes were made by buying when others were selling in panic.

Focusing on past performance - Its like driving forward while looking backwards

It is a very common perception that because a stock has done well in the past one year, it's the best stock to invest in. Retail investors do not realise that often the best performers will underperform the market in the future because their optimistic outlook has already been priced into the stock. Don't go after hot sectors that are currently producing high returns. Don't let greed drive your investment decisions. Look forward to see whether the gains produced in the past can get repeated or not. Short-term trends of the past might not get repeated in the future.
Investing is not just about picking winners, but also about avoiding mistakes. Retail investors can be better off if they avoid making the following mistakes.

Diversifying too much will kill you - Investing is all about staying alive

Beyond a point, having too many names in a portfolio can be counterproductive. You might end up duplicating, or end up taking too much exposure to a sector. Over-diversification can upset your portfolio, especially when you have not done enough research on all the companies you have invested in. If you are an active investor in the stock market, maintain a manageable portfolio of 15-25 names. Instead of adding new names to this portfolio, recognise ideal ones. Then back them with more capital. In the long-run, this will produce better returns for you than adding another 20 names to your portfolio. Investing is all is about patience and discipline. By avoiding mistakes you can improve the long-term performance of your portfolio, whatever the economic conditions prevailing in the market.

Markets crash: Selling in haste may bring heavy losses

It began with a small fall. Then there was a recovery. Experts called it volatile times. But soon the Stock Market came crashing down, day after day. Not just in Nepal but its happening world wide. Many lost all their savings. For others, it is a difficult time to make decisions. Should they sell, buy or simply hold? For investors who had a jolly ride over the past few years, it was a rude shock. It was a turbulent and unhappy ending that many investors find hard to digest. What should you do in a crashing market?

Here are a few tips:

Do not panic
Ups and downs are a part of stock markets. What goes up must come down and what comes down must go up. This explains the market behavior. It may take a few days, or weeks, or even months. But the wheel will rotate. An index cannot rise up indefinitely. So, a fall is a natural market phenomenon. The economy is strong. There is every possibility that markets will recover and bounce back to even stronger levels.

Wait and stay calm
This is the golden rule for turbulent and unpleasant times. Some people indulge in selling their shares in utter haste. Nobody can predict the markets. So why burn your fingers? Stock markets must be viewed as long-term investment vehicles. So do not sell in haste. Things will improve. It will take time and no one can predict it. Have an investment horizon of five to 10 years. Hold your stocks till then, unless there are enough indicators that the company is expected to fare badly. Stocks are good long-term investment instruments but can turn risky or even dangerous in the short term. Hence, simply hold. If you have a well-diversified portfolio, there is little need for you to worry. Even if the fall is owing to a particular sector, the other sectors will pull your returns up. To accurately time the market is impossible. Even the experts fail many times. Nobody can predict how the market mood will change the next minute. Hence, have a long-term investment horizon. For those who have to sell, exercise caution. Bad markets expose weak companies that struggle to make a regular profit. If you do not have faith in a company, selling can be your only option. Research the company before making the final sell decision. It can so happen that you sell at a loss and have to reinvest elsewhere at a high price.