Right shares of major commercial banks undersubscribed; Shortage of investable fund taking its toll

The Nepalese share market has seen its fair share of ups and downs in the recent period.  But whatever the reasons may be, commercial banks have been considered as the stable sectors for investment. As it is said that the stock market is full of uncertainty, so has the tables turned for the commercial banks. In the recent period, there has been a issuance of right shares of three commercial banks i.e. Century Bank, Mega Bank and Civil Bank. These banks had issued 1,88,54,257 unit, 2,97,85,034.63 unit and 2,07,40,886.75 unit right shares respectively. But the shareholders showed less interest in all of these issue. All of these shares went undersubscribed. Mega bank had more than 18 lakh unit shares left to be applied for while Century Bank also had more than 18 lakh unit shares undersubscribed. Civil Bank has already published a notice for auction of its unclaimed 42 lakh unit right shares. This shows that the investors are not showing proper attention towards the right issuance even though they are of commercial banks. The reason might be because of the shortage of investable funds among the investors. The high interest rate provided by the banks and financial institutions on the deposits may also have played some role in the undersubscription of right shares. Apart from these the lack of awareness among the investors might also be a reason for such passive response given by the shareholders. The inaccessibility of the shareholders to apply for the right shares has also resulted in the lack of endorsement of the right shares.