More mutual fund schemes on cards
KATHMANDU, DEC 05 -
Investors’ wait for a professionally managed collective investment vehicle, popularly known as mutual fund, came to an end when Siddhartha Capital Limited (SCL) launched its scheme last week.
And now, three more companies—Nabil Invest, NMB Capital and Laxmi Capital—are gearing up to bring such schemes soon. These four companies are the only recipients of the licence from the Securities Board of Nepal (Sebon) for mutual fund operation so far.
Mutual fund is the latest investment instrument in the Nepali market, in which stock market, commodities market, real estate and bullion used to be preferred investment avenues.
SCL’s ‘Siddhartha Investment Growth Fund’ worth Rs 400 million was the first ever mutual fund scheme open to the general public as well as institutional depositors. Launched on November 28, the company got an overwhelming response for its scheme. SCL CEO Dhruba Timilsina termed the response ‘phenomenal’.
Within a week, around 34 million mutual fund units worth Rs 340 million were subscribed by individuals, financial institutions and insurance companies, among others. “Since the remaining Rs 60 million will be invested as seed fund by SCL and Siddhartha Bank, we will publish the closing notice by Wednesday,” said Timilshina. “The allotment of the units to the subscribers will be completed within a month.”
The company has brought the closed-end scheme of the investment maturity period of five years. As per the closed-end scheme, investors must hold their investment until the maturity period.
“We brought the closed-end mutual fund scheme by critically analysing the market,” said Timilshina. “After proper management of investment and observing the market sentiment more closely, we will launch open-end mutual fund—where mutual fund units can be traded before the maturity period.”
SLC has projected an annualized return of 15 percent to its investors. The mutual fund regulation bars companies from guaranteeing the rate of return, but SCL officials say they will make investment in such a way that the targeted return is ensured to investors.
Nabil Invest and NMB Capital are launching their mutual fund schemes worth collectively Rs 1.1 billion.
Nabil Invest, promoted by Nabil Bank, is in the final stage to launch the scheme. Nabil Invest CEO Pravin Raman Parajuli said they will bring 60 million units worth Rs 600 million. Currently, the company is waiting for approval from Sebon.
NMB Capital, a subsidiary of NMB Bank, will bring a scheme worth more than Rs 500 million. “Our area of investment, rate of return and maturity period is yet to be decided,” said NMB Bank CEO Upendra Poudel.
Source: The Kathmandu Post
