Notice from NRB causes ADBL to hit circuit; NRB bars BFIs to include Preference shares in capital plan

The Nepal Rastra Bank (NRB) issued a notice to Bank and Financial Institutions (BFI) barring them from including the preference shares in their capital plan. The Nabil bank limited has proposed irredeemable preference shares worth of Rs 2 arba . Similarly the Agricultural Development Bank limited (ADBL) has 6% non cumulative irredeemable preference share worth Rs 6.44 arba. So, as per the directive the Nabil and ADBL are short of Rs 2 arba and Rs 4.58 arba respectively to reach the capital of Rs 8 arba. As the investors got whim of this directive, the shares of ADBL and Nabil skyrocketed. ADBL hit the circuit after increasing 10% of the opening price in less than fifteen minutes of releasing the directive from NRB! The shares of ADBL opened at Rs 450/unit hitting low of Rs 443/unit to close at Rs 495/unit. Similarly the shares of Nabil opened Rs 2350/unit at hitting a low of Rs2300/unit to close at Rs2435/unit. The reversal in the price of these shares is attributed to the directive from the NRB. The directive from the NRB caused this movement of price in the share market. ShareSansar contacted the Trilochan Pangeni , spokesperson of the NRB, to query the timing of the release of the directive that caused movement of price in the share market. Mr. Pangeni said,”NRB is the regulating body. The decisions of the NRB are released when necessary, irrespective of its effect on share market.” ShareSansar tried to contact Niraj Giri, Spokesperson of SEBON, to query about the statement made by the NRB. However, Mr. Giri was unavailable due to his busy schedule.