Wednesday, July 17, 2013

Foreign Employment Bond finds more takers

The subscription rate of the latest issue of foreign employment bonds soared by almost five times in comparison to last year’s issue, though it amounts to less than five per cent of the size of the offering.
The Foreign Employment Bond 2075 that attracted 10.5 per cent interest – was sold Rs 42.8 million in a week, according to the central bank that claimed that it is the highest subscription of the bond that is meant for migrant workers, Non Resident Nepalis (NRNs) and returnee workers.
Last year, the central bank had issued bonds worth Rs 1 billion but could sell only Rs 8.6 million worth foreign employment bond.
Despite offering attractive returns, foreign employment bond has been failing to attract the investors also due to low returns, awareness and lack of proper marketing.
The first foreign employment bonds, issued in the fiscal year 2009-10, had seen subscription worth Rs 4.6 million of the total issue of Rs 1 billion. It had offered 9.5 per cent interest. Similarly, in fiscal year 2010-11 too, only Rs 4 million worth bonds were sold, though the central bank had issued Rs 5 billion worth foreign employment bond.
The central bank had designated six agents — four remitters and two financial institutions — targeting NRNs and migrant workers in Malaysia, Saudi Arabia, Qatar, Kuwait, Bahrain, UAE, US, UK, Australia, Japan and Israel.
The central bank has at the last minute decided to sell foreign employment bond for the internal debt, though its coffer is stacked with billion due to government’s inability to spend and delayed budget.
The central bank had issued the bonds on July 2-10.

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