Siddhartha Investment Growth scheme after Tihar

KATHMANDU, OCT 17: 

Siddhartha Capital will soon bring Siddhartha Investment Growth scheme as it has received a green signal from the capital market regulator.

“We received the approval letter yesterday from Securities Board of Nepal,” said chief executive of Siddhartha Capital Dhruba Timilsina.

“We will float Rs 400 million worth units in the market immediately after Tihar, he said, adding the five-year scheme could, however, also be increased to Rs 500 million, if oversubscribed, according to the Mutual Fund Regulation.

The regulation has directed that the fund can allot 25 per cent more, if the units are oversubscribed. “The current trend of capital market shows that investors are slowly gaining confidence and the scheme will help boost confidence,” he added.

One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be difficult to create with low capital.

An investor will have to buy a minimum of 100 units of the scheme that will cost Rs 10 per unit and will be allowed a maximum of up to Rs 40 million, Timilsina said, adding besides general investors, institutional investors like financial institutions can also invest in the scheme as buying mutual fund units will not be considered a crossholding — like shares of other banks and financial institutions — which the central bank has barred.

Siddhartha Capital — a subsidiary of Siddhartha Bank — had applied for the approval of the scheme to the board on September 11 after the initial preparations and planned to issue units before Dashain but the board has taken its time to give approval for the mutual fund scheme that is close ended and projects 15 per cent return per annum.

The mutual fund is a type of professionally-managed collective investment vehicle that pools money from many investors to purchase securities. Closed-end funds generally issue shares to the public only once, when they are created through an initial public offering.

Source: THT