Primary issue approval declines to half
KATHMANDU:
The companies are shying away from issuing shares in the primary market due to ongoing slump of the secondary market.
According to the data the primary market witnessed a decline by 50 per cent in share issuance approval by the securities market regulator in last fiscal year.
Securities Board of Nepal (Sebon) gave nod to the issuance of shares worth Rs 7.77 billion in fiscal year 2010-11, while in a fiscal year ago, it had granted issue approval worth Rs 14.11 billion, according to Sebon’s annual report. The declining number and amount of issues signal that the over-supplied capital market will get some relief from the flood of shares in the coming days.
The companies — especially financial intermediaries — have to issue 30 per cent of their paid up capital to the general public, according to the regulation of central bank.
However, Nepal Rastra Bank (NRB) has stopped giving license to new financial institutions lessening the pressure of new share issues.
“Last fiscal year, 15 companies got approval to issue ordinary shares worth Rs 1.72 billion and one commercial bank got the approval to issue corporate debentures worth Rs 300 million,” the report stated.
The capital market regulator has witnessed the registration of bonus shares worth Rs 4.41 billion of 62 companies and promoters shares worth Rs 1.8 billion of 18 companies in the last fiscal year.
According to the report, last fiscal year, 17 companies had got approval to go float their primary shares and 31 listed companies were allowed to issue right shares. The right issue alone amounts up to Rs 5.4 billion.
“Among the 17 listed companies that were approved for ordinary share issue, 16 have completed their Initial Public Offering (IPO) and among them 12 have already been listed in the secondary market too,” the report added.
However, the secondary market listed anytime securities worth Rs 23 billion along with government bonds worth Rs 8 billion.
Despite the addition of the new shares, the depreciating value of securities due to bearish trend has also reduced the market capitalisation of the secondary market. The market capitalisation at the end of the fiscal year 2010-11 stood at Rs 323 billion that stood at Rs 376 billion at the end of a fiscal year ago, according to Nepse’s yearly data.
Chilime shares allotted
NCM Merchant Banking and Citizen Investment Trust has allotted 1.344 million unit ordinary shares of Chilime Hydropower Company to 49,190 applicants. The primary issue of the company was conducted in June in which 101,653 applicants have applied for 9.3 million units of shares at premium value of Rs 408.36 per unit.
Source: THT
The companies are shying away from issuing shares in the primary market due to ongoing slump of the secondary market.
According to the data the primary market witnessed a decline by 50 per cent in share issuance approval by the securities market regulator in last fiscal year.
Securities Board of Nepal (Sebon) gave nod to the issuance of shares worth Rs 7.77 billion in fiscal year 2010-11, while in a fiscal year ago, it had granted issue approval worth Rs 14.11 billion, according to Sebon’s annual report. The declining number and amount of issues signal that the over-supplied capital market will get some relief from the flood of shares in the coming days.
The companies — especially financial intermediaries — have to issue 30 per cent of their paid up capital to the general public, according to the regulation of central bank.
However, Nepal Rastra Bank (NRB) has stopped giving license to new financial institutions lessening the pressure of new share issues.
“Last fiscal year, 15 companies got approval to issue ordinary shares worth Rs 1.72 billion and one commercial bank got the approval to issue corporate debentures worth Rs 300 million,” the report stated.
The capital market regulator has witnessed the registration of bonus shares worth Rs 4.41 billion of 62 companies and promoters shares worth Rs 1.8 billion of 18 companies in the last fiscal year.
According to the report, last fiscal year, 17 companies had got approval to go float their primary shares and 31 listed companies were allowed to issue right shares. The right issue alone amounts up to Rs 5.4 billion.
“Among the 17 listed companies that were approved for ordinary share issue, 16 have completed their Initial Public Offering (IPO) and among them 12 have already been listed in the secondary market too,” the report added.
However, the secondary market listed anytime securities worth Rs 23 billion along with government bonds worth Rs 8 billion.
Despite the addition of the new shares, the depreciating value of securities due to bearish trend has also reduced the market capitalisation of the secondary market. The market capitalisation at the end of the fiscal year 2010-11 stood at Rs 323 billion that stood at Rs 376 billion at the end of a fiscal year ago, according to Nepse’s yearly data.
Chilime shares allotted
NCM Merchant Banking and Citizen Investment Trust has allotted 1.344 million unit ordinary shares of Chilime Hydropower Company to 49,190 applicants. The primary issue of the company was conducted in June in which 101,653 applicants have applied for 9.3 million units of shares at premium value of Rs 408.36 per unit.
Source: THT
