Commercial banks raise home loans rate

More than half a dozen commercial banks have hiked home loan rates by as much as 1.5 percentage points - a move which will disappoint borrowers deeply, citing increase in cost of capital. Banks like NMB Bank, Global Bank, Nepal Industrial and Commercial (NIC) Bank and KIST Bank have enforced the new rates from the new fiscal year, starting from Sunday this week. Following the change, NIC Bank´s home loans rate has jumped to as high as 16.49 percent. Similarly, rate of NMB Bank also stands at over 16 percent, while that of KIST Bank has gone up to the range of 14 to 16 percent.

The fresh hike has also jacked up the industry average rate of home loans to just over 16 percent. So far, the industry average rate was over 15 percent. "We had to raise the rates mainly because the central bank´s directives sought us to close the interest rate gap between different savings schemes to 2 percent or less. This raised our cost of capital," said Upendra Paudel, chief executive of NMB Bank. The central bank has asked the banks and financial institutions to bridge the gap in rate between different savings products, mainly as bankers, while luring fresh deposits, offered higher rates to new depositors only, leaving old accounts holders deprived of due interest return.

Banks were offering as high as 10 percent interest return to new depositors, whereas older depositors were offered as low as 3 percent. "This is not fair. The banks must bridge the gap to 2 percent or less," NRB had said in its directives. Though a few banks had instantly complied with the directives, most of the BFIs are just gearing up to implement it. As a result, sources told Republica that more banks may follow the suit and raise lending rates because they are ´left with no choice´ as they have raised the rate of minimal interest rate to bridge the gap.

"As liquidity problem has not faded away in a large number of banks, they cannot lower the higher rates. And the unwanted raise of lower savings rate has gone up to increase cost of capital," said the source. Interestingly, the latest hike in lending rate has come contrary to what Nepal Bankers´ Association (NBA) had announced about a month ago. With the ease in liquidity in leading banks, NBA had said they have lowered the interest return to corporate clients by as much as a percentage point. "We believe this will eventually lead to drop in lending rates," NBA president Ashok Rana had told Republica then.

Source:
myrepublica

NMB Bank Education Plan

NMB Bank launched Education Plan ¿ a recurring deposit account ¿ especially for children. It offers a fixed maturity period of three to 15 years at a fixed interest rate with a minimum monthly deposit of Rs 500. Parents can open the account for their children as young as one day to 12 years. "Educating children is a major expense for parents," said Upendra Paudyal CEO of the bank that also unveiled its new corporate campaign called `With you Always'.

Source:
tht

NMB Bank introduces e-pal card

NMB Bank introduced NMB e-pal card from its Banepa branch from Monday. NMB e-pal card can be used in restaurants, departmental stores, medical shops, electronics shops, books and stationary depots, clothing stores, petrol pumps and other shops to make cashless transactions. The bank will soon collaborate with water and electricity authorities so that people do not have to wait in line for hours to pay utility bills. Customers do not need to have bank account to get an e-pal card. Since a customer can buy items through the card and sellers have their account credited automatically, it is believed to be useful.

Source:
tht

Announcements

Notice of NMB Bank and NMB Capital: NMB

NMB Bank and NMB Capital Ltd has jointly issued notice as all the works carried out by NMB Bank regarding RTS service will now handled by NMB Capital Ltd. 

Upcoming 15th AGM: NMB

NMB Bank Ltd has announced its upcoming 15th annual general meeting to be held on 10 October 2010 (2067 Ashwin 24).

Error Corrected: NABIL

Nabil bank has corrected the error on notice published regarding the 26th AGM.

Ordinary Share Allotment: Kankai Bikas Bank

Kankai Bikas Bank Ltd has allotted its ordinary share to 6725 applicants on 18 September 2010 (2067 Ashwin 2) which is based on following model.

Share Slip Distribution & Money Return Notice: Garima Bikas Bank

Garima Bikas Bank Ltd is distributing share slip and returning the money to the non-allotted applicants from 19 September, 2010 (2067 Ashwin 3).

Upcoming 4th AGM: CDBL 

City Development Bank Ltd has announced its upcoming 4th annual general meeting to be held on 12 October 2010 (2067 Ashwin 26).

10% Cash Dividend & 10% Bonus Share: NMB Bank

The BOD meeting of the company dated 2067/05/31 has decided to give 10% bonus share which was approved by NRB and 10% cash dividend.

Source: 
nepalstock.com

7lakh shares of NMB Bank as Further Public Offering.

NMB Bank Ltd is issuing 715000 units of share as Further Public Offering at face value of Rs.320 from 19 March ( 2066 Chaitra 6 ).

Right Share Listed: NMB Bank Limited

NMB Bank Limited has listed right share (53586 units) from serial no 11000001 to 14300000 at Nepal Stock Exchange for trade.

Source:
Jamb News Service

Companies eye to float 50m units of shares

A total of 23 companies have sought approval from Securities Board of Nepal (SEBON) - the capital market regulator - to issue over 47.5 million units of rights and ordinary shares worth over Rs 4.75 billion to increase their capital base. According to SEBON, nine finance companies, eight development banks, five commercial banks and a company from others group have lodged application for issuing shares. As per existing provision, companies have to get approval from SEBON and Nepal Rastra Bank, the central bank, for the rights issue, bonus and ordinary shares after a proposal to this effect is endorsed by general assembly of the companies.

Under the finance group, Investa Finance, Valley Finance, Capital Merchant Banking and Finance, Shubhalaxmi Finance, Siddhartha Finance, Suryadarshan Finance, Zenith Finance, Merchant Finance and Yeti Finance have sought permissions for issuing shares. Of them, five have sought approval for rights issue, while four have lodged applications for ordinary shares issue.

Similarly, Muktinath Bikash Bank, Sewa Bikash Bank, Nilgiri Bikash Bank, Western Development Bank, City Development Bank, Paschimanchal Development Bank, Subhechha Bikash Bank and Triveni Bikash Bank have also approached SEBON for approval. Five of them have approached SEBON for ordinary issue, while remaining three have sought permission for rights issue.

Likewise, Agriculture Development Bank, Kumari Bank, NMB Bank Ltd and Citizens Bank International have also registered their applications for rights as well as ordinary issue, whereas City Homes Ltd of others group has approached SEBON for initial public offering (IPO). Meanwhile, SEBON has already granted permission to 21 companies for issuing shares as of mid-November. They will together issue over 48.80 million units of ordinary shares and rights shares worth Rs 4880.26 million.

Seven of the companies getting approval are finance companies, while nine are development banks, three insurance companies and two commercial banks. Similarly, seven development banks have got nod from the SEBON to issue ordinary shares.

Share prices mostly go up in the market in response to the announcement of rights and bonus shares. However, share prices in the Nepal Stock Exchange has gone down sharply following the announcements as number of investors did not increase to the extent of the number of shares that entered into the market.

"Limited number of brokers and confinement of their services only to the Capital and lack of institutional investment in the share market have badly affected the development of share market," SEBON Chairman Surbir Paudel told myrepublica.com on Wednesday. "Because of this fact, most of the small investors have suggested us to convert promoters share into ordinary shares by not more than two percent a year."

Source:

myrepublica.com

Door opens for Agricultural Dev. Bank IPO

The Agricultural Development Bank Limited (ADBL) has named its issue manager Ace Development Bank as underwriter of its ordinary share issue. It has opened door for ADBL to get approval from Securities Board of Nepal for issuing shares.

The ADBL is working to issue ordinary shares worth Rs. 960 million which is the largest ever initial public offering (IPO) in the country. "The ADBL board on Nov. 10 decided to award the job of underwriting the ADBL's shares to Ace as its quoted fee was lower than its rival NMB Bank," said a senior ADBL official. Ace had quoted Rs. 775,000 against Rs. 960,000 by NMB, added the official.

The underwriter promises to purchase the shares if the public doesn't buy them in the amount desired by the issuing company. Although the bank had called for quotations from seven merchant bankers including Elite Merchant Banking, Citizen Investment Trust, Vibor Development Bank, NIDC Capital Markets and Development Credit Bank besides Ace and NMB, these two were the only takers for the underwriting contract. SEBON, the regulatory body of the stock market, had delayed giving permission to the ADBL to go for an IPO for its failure to have its shares underwritten as per the SEBON directive. The SEBON had also sought more disclosure about its financial status.

As per the directive, any company going for an IPO should ensure underwriting of half of the total shares to be issued. Only companies that have received a license from the board can underwrite the shares. The ADBL had difficulty finding merchant bankers to underwrite its shares worth a whopping Rs. 480 million with the central bank preventing B and C class financial institutions from underwriting more than 20 and 10 percent respectively of the primary shares. Nepal Rastra Bank (NRB) resolved the problem by issuing a fresh directive on Oct. 30 freeing all classes of financial institutions from this restriction. "We could not have been able to underwrite the shares as per the SEBON directive if NRB had not issued a new directive removing the barrier on underwriting," said Siddhant Raj Pandey, chief executive officer of Ace. "The provision of underwriting 50 percent of the total shares is worthless as it only increases the expenses of the issuing bank."


ADBL officials also said that they would have been compelled to pay a higher fee for underwriting as only a few merchant bankers could compete in the bidding process as per the earlier NRB directive. ADBL officials said that the bank's board would decide to approach SEBON within a day or two after meeting the required criteria. SEBON spokesman Niraj Giri said that the ABDL was most likely to get its approval the next time as it had ensured underwriting as per SEBON directives. "The disclosure related prerequisites are not so big problems," he added. The ADBL is issuing 30 percent of the shares to the public. With this IPO, the stake of the government in the ADBL will remain at 55.86 percent. The bank issued 14.14 percent of its shares to the public two years ago, especially to those who had been clients of the ADBL once.

Source: 
ekantipur.com

Three banks take the lion's share

Three merchant banks, NIDC Capital Markets Limited (NCML), NMB Bank limited and Ace Development Bank are neck and neck in business competition whereas the others are struggling hard. Out of 63 companies whose shares and debentures were issued last fiscal year, 18 chose NCML as their merchant bank, 17 went for NMB Bank and 13 settled with Ace Development Bank. This means the three occupied 76.19 percent business as a whole.

Citizen Investment Trust (CIT) received five clients, Nepal Finance (NEFINSCO) and Elite Capital four each, and Development Credit Bank and CIT/NCML one each. These three companies have ruled the roost during the past four months of the current fiscal year, too, with NMB getting business from six companies, NCML from five and the Ace from four. The Civil Capital got business from two companies and CIT from one.

Chief Executive Officer of NMB Upendra Poudel said that his bank pioneered shares applications through the internet and took other inventive measures that helped enhance its credibility and clients' trust. "We have been longer in the business, which has also helped us to win more clients," he added. Although there are 18 merchant bankers registered with the SEBON, only eight companies last year and four this year got business to manage the issuance of shares and debentures. Then, why are an increasing number of merchant banks coming up in the market? Niraj Giri, spokesman of Securities Board of Nepal (SEBON), said companies get attracted to this business as it opens many avenues, including issuance of shares, underwriting (guaranteeing to purchase share in case of non-subscription of shares), and portfolio management (making investment decisions using money other people have placed under his or her control) and registration of shares.

Besides 18 more companies already registered with the SEBON are awaiting final approval from the SEBON for merchant banking. They include Nabil Bank, Capital Investment and Development Company, National Investment and Capital Markets and Akash Investment. Financial institutions are attracted to this market as they want to reach wider market through mass marketing. "Many business opportunities have also been created in the capital market for the merchant bankers," Poudel added. Most of the jobs for the merchant banks have been related to rights share issuance, according to SEBON. Out of 18 companies receiving approval for issuing shares this year, 11 are for rights issues and the rest for ordinary shares. As many as 63 companies got approval to issue shares last year. Of these, 50 got approval to issue rights shares, 11 for ordinary shares and two for debentures.

NEPSE Weekly Update

09-Oct-09
Jamb Daily News Service
This week, the benchmark index at home bourse moved one step forward and two steps back primarily led by financial stocks. Following the weeklong holiday on Dashian festival the sole secondary market kicked up with spurring gains on initial couple of days, however failed to sustain its gains on price adjustment of Standard Chartered Bank after book closing date. SCB closed its book from 6th Oct. to 4th Nov. 09 for the purpose of having its Annual General Meeting on 4th Nov. 09 which will approved 50% cash and 50% stock dividends from the profit of fiscal year 2008/09. Along with SCB other key companies at Nepal stock exchange dragged down on pessimistic outlook amid growing chaos on political and economical milieu.
The benchmark Nepse index added 3.89 and 2.43 points for consecutive opening days respectively to 636.87 on Monday however plummets to 613.18 on Tuesday as price of SCB fell 26.67 percent to Rs. 3960 after book closing date along with other downswing financial stocks. At the closing session of week, the battered outlook of investors withdrew their hands from most of the financial stocks that led Nepse index to settle at 604.37 down 30.07 points or 4.74 percent.
Commercial banks which command the most trading volume at sole secondary market dipped hefty of 50.53 points or (-7.90%) to 588.96 from the opening of 639.49 Sunday. The biggest losers of the week from commercial banking sectors were SCB that lost 32.90% to Rs. 3620, NMB Bank fell 4.91% to RS. 368, DCBL Bank slid 4.57% to Rs. 334, Nepal Bangladesh Bank tumbled 4.32% to Rs. 288 along with others banks. Likewise, development bank slid 15.68 points to 653.65 from opening of 669.51 fronted by loss on Annapurna Bikash Bank (Rs. 431, -7.31%) and Swabalamban Bikash Bank (Rs. 650, -6.61). Finance plummet diminutive of 0.35 points to 635.14 while others dragged down 5.88 points to 646.19. However, hydropower surged 3.59 points to 827.69 from opening of 824.10 along with 1.89 points augment in insurance sector.
Dragged down in scrip price of Standard Chartered along with other financial stocks dented the Sensitive index. At the closing session of week, 78 scrip domestic blue chip slump 11.11 points or (-6.78%) to 152.52. Sensex consist 14 commercial banks, 37 finance companies, 15 development bank, 10 insurance companies and one each from hydropower and manufacturing companies. Similarly, float Index an indicator of performance of ordinary shares in the market lost 2.80 points 57.84.
Merely 90 companies registered their presence in the secondary market over this week. Losers overshadowed the market as 22 companies advanced and 47 companies declined. All in all 542,852 shares traded via 4141 transaction over the week. Moreover, Rs. 280,732,672 turnovers were realized along with Rs. 2,171,138.41 million market capitalizations.
This week, Standard Chartered Bank topped the chart of turnover amounting to Rs. 52.60 million, in terms of share quantity Nepal Bangladesh Bank lead the rank with 165000 units' shares and Pashupati Development Bank fronted in number of transaction with 546 transactions.
During the week, Nepal Express Finance listed 240000 units right share and 1075654 units bonus shares of Kumari Bank along with 600000 units ordinary shares of Api Finance has been listed in Nepal Stock Exchange.

Standard Chartered Bank's book closure drags Nepse down by 23.69 points

REPUBLICA
KATHMANDU, Oct 6: In an unprecedented case seen in Nepal´s capital market, shareholders of Standard Chartered Bank (SCB) lost Rs 1,440 per share in a single trading day on Tuesday, prompting Nepal Stock Exchange (Nepse) index to shed 23.69 points.
Price of SCB shares dropped to Rs 3,960 per share from previous close of Rs 5,400 on Tuesday´s trading, where 200 units of bank´s shares changed hands. Book close cutoff date, the day after which company will not handle any transfer of shares requests until benefits dividends or bonus issues are transferred, of the bank on Monday and new pricing from Tuesday pushed down the price sharply.
SCB, one of the largest profit making private banks, has announced 50 percent bonus share and Rs 50 per share as cash dividend to its shareholders.
The huge loss in the share price of SCB pushed down the benchmark Nepse by 3.72 percent or 23.69 points to close at 613.18 points. During previous two trading sessions, Nepse had recorded marginal gains after weeklong Dashain holidays.
Sensitive index, an indicator of trading of Class A category companies, shed 8.61 points or 5.24 percent at the end of Tuesday´s trading session. Banking, the dominant trading group in Nepal´s capital market, lost whopping 39.28 points to drop at 604.24 points in its sub-index with the loss in the share prices of major banks, including Standard Chartered Bank, NMB Bank, Bank of Kathmandu and KIST Bank.
Development Bank and Hydro Power groups also saw their sub-indices slip by 2.3 points and 7.8 points to 666.54 points and 814.77 points respectively. However, Finance and Insurance groups registered marginal gains of 0.89 points and 1.48 points to close at 638.03 and 608.52 points respectively at the end of Tuesday´s session.
Total turnover reached Rs 6.07 million with 163,259 units of shares and 58 scrips changing hands through 695 transactions on Tuesday. Total market capitalization -- total worth of listed shares -- has reached Rs 429.90 billion.