The central bank's decision to raise minimum paid-up capital of bank and financial institutions (BFIs) have unleashed rights issue spree in the banking sector.
While many BFIs have unveiled plans to meet the new capital floor solely through bonus shares and rights issues, those who are eying partners for merger or acquisition are also offering shares through issues to plug a shortfall of funds.According to Securities Board of Nepal (Sebon), a total of 27 BFIs are awaiting nod of the capital market regulator to issue rights shares to their shareholders. Sebon's data shows that 54.73 million units of rights shares worth Rs 5.47 billion is in the pipeline as at January 8.
As many BFIs are still in the process of completing their annual general meeting, which authorize their rights issue, more shares are likely to be floated in the current Fiscal Year 2015/16 and the next Fiscal Year 2016/17.
Nepal Rastra Bank (NRB) has given BFIs until mid-July 2017 to meet the new capital requirement.
According to Sebon, 13 finance companies, 13 development banks and Citizens Investment Trust have applied at Sebon to issue rights shares. Sixteen BFIs, including Prabhu Bank Ltd (PBL), Machhapuchchhre Bank Ltd (MBL), Century Commercial Bank Ltd (CCBL) and Sunrise Bank Ltd (SBL), have already received permission to issue rights shares worth Rs 3.05 billion. MBL is floating 5:1 rights shares, while CCBL and SBL are issuing rights shares in 4:1 and 20:3 ratio, respectively. Similarly, PBL has got the nod of the capital market regulator to issue 10:2 to right shares.
The decision of BFIs to issue rights and bonus shares has elated the stock market investors. They believe that the central bank's decision will be an opportunity to make gains as most of the BFIs are bound to issue rights and stock dividends. Such buoyancy of investors is also reflected in the Nepal Stock Exchange (Nepse) index. The benchmark index is setting new records almost every day. Most of the BFIs have seen their share prices go up, as their shares are high in demand.
source:republica,11 feb 2016
LINK
While many BFIs have unveiled plans to meet the new capital floor solely through bonus shares and rights issues, those who are eying partners for merger or acquisition are also offering shares through issues to plug a shortfall of funds.According to Securities Board of Nepal (Sebon), a total of 27 BFIs are awaiting nod of the capital market regulator to issue rights shares to their shareholders. Sebon's data shows that 54.73 million units of rights shares worth Rs 5.47 billion is in the pipeline as at January 8.
As many BFIs are still in the process of completing their annual general meeting, which authorize their rights issue, more shares are likely to be floated in the current Fiscal Year 2015/16 and the next Fiscal Year 2016/17.
Nepal Rastra Bank (NRB) has given BFIs until mid-July 2017 to meet the new capital requirement.
According to Sebon, 13 finance companies, 13 development banks and Citizens Investment Trust have applied at Sebon to issue rights shares. Sixteen BFIs, including Prabhu Bank Ltd (PBL), Machhapuchchhre Bank Ltd (MBL), Century Commercial Bank Ltd (CCBL) and Sunrise Bank Ltd (SBL), have already received permission to issue rights shares worth Rs 3.05 billion. MBL is floating 5:1 rights shares, while CCBL and SBL are issuing rights shares in 4:1 and 20:3 ratio, respectively. Similarly, PBL has got the nod of the capital market regulator to issue 10:2 to right shares.
The decision of BFIs to issue rights and bonus shares has elated the stock market investors. They believe that the central bank's decision will be an opportunity to make gains as most of the BFIs are bound to issue rights and stock dividends. Such buoyancy of investors is also reflected in the Nepal Stock Exchange (Nepse) index. The benchmark index is setting new records almost every day. Most of the BFIs have seen their share prices go up, as their shares are high in demand.
source:republica,11 feb 2016
LINK
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