Nepal Investors Forum urges investors to be cautious while buying promoter shares of NIB

ShareSansar, September 3:

Nepal Investors Forum has alerted the investors while making the decision of buying the promoter shares of the Nepal Investment Bank Ltd (NIB) which the Rastriya Banijya Bank is divesting through the open bidding.

According to the notice published by the Forum on Wednesday, it said its attention has been drawn to the recent announcement of the RBB to auction its crossholding of the NIB.

The Forum cautioned the investors while buying the promoter shares of NIBL since there was no clear written commitment from the regulatory bodies like Nepal Rastra Bank, Securities Board of Nepal (Sebon) and Nepal Stock Exchange to ensure the easy tradibility of such scrips in the market.

Forum’s statement has come amid confusions among the investors regarding the tradibility of cross-holding promoter shares in the market. RBB is selling its 6,220,066 units of shares of NIB and 198,497 units of Nepal Aawas Finance Company Ltd through open bidding after its efforts to find buyers interested to buy shares in bulk went in vain.

The Forum also cited a provision of the NRB introduced in the Monetary Policy of 2014/15 which states about ending the classification of the promoter shares of the banks and financial institutions (BFIs) which can hinder the easy tradibility of the promoter shares in the market.

“Existing provision of categorizing the promoters of BFIs into different groups will be ended by bringing all promoters into one single group,” the Monetary Policy of the NRB reads.

RBB’s treasury department chief Bhupendra Pander had, however, said with ShareSansar that the trading of the promoter shares will be conducted as per the directives of the NRB regarding the promoter shares crossholding.

“We have asked the Nepse about its tradability process and they have said that it will be traded like the NABILP. However, we have not got any written assurance of that,” RBB treasury department chief Bhupendra Pandey said.