Commerz and Trust Bank allots shares

Commerze and Trust Bank Nepal has allotted six million units of its ordinary shares to the public today.
Some 70,850 applicants have applied for over 68.24 million units of shares.
"Including mutual funds and staff, who were allotted 300,000 units of shares each, a total of 70,760 applicants were allotted the shares as some 90 applications were invalid," according to the merchant bankers — Citizen Investment Trust, Nabil Investment, Civil Capital and Growmore Capital — that were appointed as the issue and sales managers for the issue of primary shares of Commerz and Trust Bank Nepal.
The bank has alloted the share according to the allotment model prescribed by the regulator of capital market — Securities Board of Nepal (Sebon) — that has directed 40 per cent of shares to small investors — up to 500 units of shares — and 60 per cent shares to big investors, who have applied over 501.
The 29th commercial bank had floated its Initial Public Offering (IPO) from February 17. The issue was closed in four working days, after it had receives overwhelming response that was some 12.63 times more. "Due to the oversubscription, the small investors applying for up to 500 units of shares were allotted 10.97 per cent and big investors, who have applied above 500 units were allotted 6.68 per cent as according to the current regulation the primary shares should be allotted proportionately based on the total amount of applications received."
The investors will get their remaining money from next week," said the chief executive of the bank Anal Raj Bhattarai. "Commerz and Trust Bank Nepal will list its shares at the Nepal Stock Exchange (Nepse) soon."
The bank that started operations on September 20, 2010, with a paid up capital of Rs 1.40 billion will have a paid up capital of Rs 2 billion now.

Nabil mutual fund oversubscribed, closed

Nabil Bank’s Nabil Balanced Fund I has been well received by the public.

The new fund offer for Nepal’s second mutual fund — Nabil Balanced Fund I worth Rs 600 million — that had opened on March 20, closed today.

"We believe that the offer got oversubscribed by almost four times based on the initial report, though some districts have yet to report the final tally," said chief executive of Nabil Investment Pravin Raman Parajuli.

Nabil Investment is a merchant banking subsidiary of Nabil Bank that works as the fund manager and depository for the mutual fund.

Following the high number of applications for the mutual fund units priced at Rs 10, Nabil Investment will be allotting units worth Rs 750 million as allowed by Mutual Fund Regulations 2067.

Nabil Bank will work as the sponsor for the mutual fund managed by its merchant banking subsidiary.

The scheme's portfolio is planned to contain 70 per cent equities and the rest is divided in fixed income instruments such as government securities and fixed deposits. The objective of the scheme is to balance the risk of the portfolio by investing in a mix of securities.

The close-ended scheme with a five-year tenure is expected to provide 18 per cent annual dividend on average to unit holders.

Nabil Balanced Fund I to open this week

Though mutual funds are safer investment tools, people still have to be well informed of the background of sponsors and fund managers before investing in any scheme, according to Pravin Raman Parajuli, chief executive of Nabil Investment — a merchant banking subsidiary of Nabil Bank — which will launch the scheme ‘Nabil Balanced Fund I’ on March 20-24.
Their risk appetite and professional strength are key, he said, adding that Nabil Investment — the fund manager for the five-year close ended mutual fund scheme ‘Nabil Balanced Fund I’ — which is floating the scheme worth Rs 600 million has sound professional strength to manage the scheme, apart from its sound technical and fundamental background.
“Nabil Investment that has been licensed by Securities Board of Nepal to work as a fund manager and depository for the scheme has a three-year experience in professional portfolio management besides merchant banking, and the backing of Nabil Bank, the sponsor of the scheme that has an experience of three decades,” he said. “Our main target is to mitigate risk and maximise profit for our investors by professionally managing the fund.”
However, the domestic secondary market that is dominated by banks and financial institutions offers limited opportunity for mutual funds to diversify their portfolio. “Limited instruments and lack of sectoral diversification leading to concentration risk are definitely the challenges but more real sector companies entering the secondary market will expand the market,” opined Parajuli.
He was hopeful that the capital market regulator will enhance its capacity and become more dynamic in the wake of more mutual funds being floated in the market and attract more real sector companies with sound corporate governance to expand the secondary market. “The depth and expansion of the secondary market will help in the growth of mutual funds in the future.”
“Besides a strong and professional regulator, government policies will also help chart the future course of mutual funds that are the best instruments to mobilise small investments,” he said.
The general public will be more attracted to mutual funds if the government assures them of tax exemption as is the international practice, Parajuli added.
An investor can invest a minimum of Rs 1,000 on Nabil Balanced Fund I as one can apply for a minimum of 100 units that has a face value of Rs 10 per unit. The units will be listed at Nepal Stock Exchange (Nepse) for trading and can be easily liquidated.

Commerz and Trust Bank Nepal IPO oversubscribed by over 11 times

Commerz and Trust Bank Nepal's Initial Public Offering (IPO) has been oversubscribed by over 11 times the size of the offering.

"The IPO received overwhelming support as some 72,000 applicants asked for shares worth Rs 6.82 billion," said chief executive of the bank Anal Raj Bhattarai.

"The market has shown tremendous confidence in the bank," he added.

The bank had opened its public offering for ordinary shares worth Rs 600 million at a face value of Rs 100 per unit on February 17. An investor was allowed to apply for a minimum of 50 unit shares and to a maximum of 1,500,000 units. The shares will be alloted proportionately based on the total amount of applications received within 40 days of the IPO's closing.

It will be the 29th commercial bank to be listed at Nepal Stock Exchange. Commerz and Trust Bank Nepal had appointed Citizens Investment Trust, Nabil Investment, Growmore Merchant Banker and Civil Capital as issue managers for the primary shares.

Civil Bank allots shares

Civil Bank has allotted its ordinary shares to the public.

The bank has distributed eight million units of ordinary shares to 57,588 subscribers based on Proportionate Securities Allotment System.

Small investors who had applied for less than 500 units received 27.09 per cent of the total amount applied for. Likewise, large investors who had applied for more than 500 units of shares were allotted 10.19 per cent of the total amount applied for based on the allotment system.

The Initial Public Offering (IPO) was oversubscribed by almost seven per cent as investors had applied for shares worth Rs 5.40 billion.

"Investors who have purchased shares during the IPO will benefit as share prices will definitely go up after the listing," pointed out CEO of the bank Kishore Maharjan. The bank earned Rs 22.7 million as net profit in the last fiscal year.

"We will list the bank at Nepal Stock Exchange (Nepse) as soon as possible," he added.

The 30th commercial bank had offered eight million units of ordinary shares at a face value of Rs 100 for the public from December 10 to 13. Citizens Investment Trust, Nabil Investment, NCM Merchant Banking and Ace Capital were the issue managers for the IPO.

Currently, more than 510 million unit shares of 27 commercial banks, with a total paid up value of over Rs 51.07 billion, are listed at Nepse that is dominated by banks and financial institutions.