The Securities Board of Nepal (Sebon) has granted approval to 12 companies to issue rights shares worth Rs5.71 billion to their shareholders in the first two months of the current fiscal year. 

Among the companies getting the go-ahead, one is a commercial bank, eight are development banks and the remaining three are finance companies. 

According to Sebon, these companies have been okayed to issue 57,185,427.24 rights shares at the par value of Rs100 per share. 

Banks and financial institutions (BFIs), in particular, have been working to issue rights shares to fulfil the increased capital requirement set by Nepal Rastra Bank.

As per the monetary policy 2015-16 issued by the central bank, the capital requirement for commercial banks has been hiked to Rs8 billion from Rs2 billion.

Likewise, the capital requirement for national-level development banks has been raised to Rs2.5 billion from Rs640 million, and for national-level finance companies to Rs800 million from Rs200 million.

The central bank launched the policy in a bid to limit the mushrooming number of BFIs by encouraging them to merge. However, many of them have chosen to raise 

capital by issuing rights or primary shares instead of merging. 

Deputy spokesperson for Sebon Niranjaya Ghimire said companies from the financial sector had mostly issued rights shares to fulfil the capital requirement by the deadline. The central bank had given BFIs until the end of the last fiscal year to do so.

Mega Bank has started issuing rights shares worth Rs2.97 billion in the ratio 10:6.5. Among the development banks, Muktinath Bikas Bank will be issuing the largest amount of rights shares worth Rs617 million. 

The other development banks okayed to issue rights shares are Om Development Bank, RSDC Laghubitta Bittiya Sanstha, Nepal Community Development Bank, Bhargav Bikash Bank, Excel Development Bank, Summit Microfinance Development Bank and Kishan Microfinance Bittiya Sanstha. 

Likewise, Jebil’s Finance will be issuing rights shares worth Rs288.95 million. Guheswori Merchant Banking and Finance and General Finance have also received approval to issue rights shares. 

Meanwhile, another 18 companies listed on the Nepal Stock Exchange are awaiting Sebon’s approval to issue rights shares. They plan to issue rights shares worth a combined Rs12.94 billion. 

Among them, Shangrila Development Bank, Central Finance, Prudential Insurance and Gurans Life Insurance are in the final stages of completing their documentation, said Sebon.

Stockbrokers urge policy changes

KATHMANDU: Stockbrokers on Sunday urged the government to focus on reforming policy, technology and structures to develop the capital market. They have made a 10-point recommendation to State Minister of Finance Udaya Shamser Rana and have requested the government to prioritize the development of the capital market.

Stockbrokers have asked the government to charge transaction tax instead of the existing capital gains tax, enforce progressive capital gains tax and extend their work area to margin lending and investment management, among others. 

Encouraging real sector companies to go public, diversifying investment instruments, establishing an auction market, implementing a full-fledged online trading system, privatising the Nepal Stock Exchange and CDS and Clearing, permitting non-resident Nepalis to invest in the secondary market and developing the Securities Board of Nepal as an autonomous body are among their other demands.  (PR)