Parash Mani Dhakal, CEO of Global IME Capital: Allotment of Global IME Samunnat Scheme-1 to happen without delay

Mr. Parash Mani Dhakal, a Member of ACCA (Association of Chartered Certified Accountntants) and ISACA (The Information System Audit& Control Association), DipIFR Holder and Masters in Business Studies possesses extensive level of experience in the field of auditing, finance, Operation & Treasury, and academic for around 14 years. He has worked as Sr. Audit Manager for five plus years in G& G Associates, Chartered Accountants.  He has also worked in treasury, operation and finance department as a member of management team in Prabhu Bank Ltd. (then Prabhu Finance Ltd.) and Jyoti Bikash Bank Ltd. for a period of almost five years. He is also acting as faculty of academic institutions of Nepal to Bachelor and Masters Level in management.

He joined Global IME Capital Ltd. (then Elite Capital Ltd.) as General Manager. Currently, he is working as Chief Executive Officer of the company.

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1. Global IME Capital has brought Global IME Samunnat Scheme-1. Please, tell us about this scheme.

Global IME Samunnat Scheme-1 is a growth fund scheme floating public issue of Rs 80 crore from today (Falgun 2, 2072). The mutual fund scheme will be managed by Global IME Capital, 60% subsidiary of Global IME Bank.

Global IME Samunnat Scheme-1 is basically a 7 year closed-end mutual fund scheme. The offer will close on Falgun 5 at the earliest. The maximum closing date for the offer is Falgun 16, 2072.

During the first year we will invest 70% to 80% in share market, 10% in fixed income instruments and 10% in IPOs. So, our concentration is on the growth of secondary market of Nepal.

2. NEPSE Index is at an all time high and if we listen to experts the index may cross 1300 mark soon. As the focus of this mutual fund is investing in secondary market, is it right time for a new mutual fund?

First of all, it is not that we have to invest immediately in the secondary market. We have experts with us to analyze the market and the individual scrip fundamentally and technically before we make an investment decision.

Secondly, when we prepared prospectus for this scheme, we were prepared for the market to be in all time high which has in fact turned into a reality now.

3. If we look at the trend among mutual funds in Nepal, the share price of mutual funds have remained below par value of Rs 10/unit for some time after being listed. How are you going to tackle with that issue?

We do acknowledge this issue in the mutual fund sector of Nepal. Individual investors have not fully understood importance and the way mutual funds works. Our market is driven by investor psychology and dividend the listed company has to offer. Another truth is that when the share price of mutual fund is lower, it is hard to get a sizable quantity from share market. The book value of other publicly listed companies is well below the price being traded while the Net Assets Value (NAV) of mutual funds is above the par value of Rs 10.

4. Like in every IPO, we have been hearing shortage of application forms at branches of Global IME Bank ltd. Why is it so?

It is true that few branches of Global IME Bank may not have received the application forms on time. We have planned to dispatch forms on Magh 27, by Magh 28 it should have reached the branches of Global IME bank and the public distribution of forms should have started by Magh 29. Unexpected public holiday on Magh 27 to mourn the demise of former PM Sushil Koirala disrupted our pre-planned supply chain.

5. Operating Profit is in negative and employee expenses have risen of the fund manager Global IME Capital Ltd. What are the reasons for that?

We started the process to launch mutual fund from last year. In order to manage a mutual fund we need skilled manpower as opposed to run merchant banking activities. This is the main reason for increased employee expenses. Negative operating profit is the reality in our sector due to razor thin margin and tough competition. As long as we have net profit in positive territory we are good.

6. What would be the timeline for the allotment of this IPO issue?

Our target is to allot the shares within 30 days which will also depend on the number of applications we will receive. The current interest rates are not that good, so allotment will occur without further delay. The current ongoing energy crisis will also dictate the time taken for the allotment process. Furthermore, there has been trend among merchant bankers to conduct allotment as soon as possible. For example the FPO of Shikhar Insurance was allotted within 30 days. So, we are committed to allot shares as soon as possible.

7. What do you think would help the growth of Mutual Funds in Nepal?

First of all investor must be well informed about Mutual Funds. Secondly, the brokerage commission is very high in Nepal. If we were to look at the expenses of Mutual Funds in Nepal, broker commission records the highest expenditure for us. If broker commission is lowered to meet international standard, mutual funds would be saving a lot of money.