NRB Invests on China’s Treasury Bills

Nepal Rastra Bank has begun investing on China’s treasury bills. It is the first time Nepal is investing on Chinese government’s bonds.  “We are investing on Yuan like we have been doing on other foreign currencies”, Bhaskar Mani Gyawali Spokesperson of Nepal Rastra Bank, said. The Central Bank is investing Rs 30 billion though initially it had decided to invest Rs 60 billion. Stating that it is a very sensitive issue, Gyawali however denied to publicly disclosie the investment size. 

 

It took two years to pave way for the Central Bank to invest on the treasury bills of the Chinese central bank. Last year, NRB had requested People’s Bank of China to open up ways for investing in Chinese treasury bills. NRB decided to divert its investment to China as the interest rate in USA  was experiencing a heavy downfall during that time. A few months back Chinese central bank responded to NRB’s request and allowed the  latter to open account in Chinese Yuan.

 

The biggest share of foreign exchange reserve of NRB is in US dollar while the second biggest investment is in Indian rupees. Likewise, NRB has also  been investing in other foreign currencies like Japanese Yen, Euro, Sterling Pound, Australian dollar, Canadian dollar and so on. More than 70 per cent of the annual income of NRB is obtained from the investment in foreign treasury bills. 

 

Currently, the return on Chinese treasury bills is beyond 4 per cent. In the last 10 years, the overall return on Chinese treasury bills has been somewhere near 3.7 per cent. As investing in Chinese Yuan would be of less risk, NRB has been enthusiastic towards this investment. An agreement between both nations reached a decade ago has already made provision to exchange Chinese Yuan in Nepali banks.

 

43 Companies Preparing for Share Issuance

Within few months some companies are set to add their shares of 100 million units worth Rs 10.52 billion in the share market. 43 companies from different sectors have already submitted application for share issuance in Securities Board of  Nepal (SEBON). According to a SEBON source, the companies will issue their shares only after the approval from the stock market regulator.

 

Among them 66.12 million are right shares whereas and 39 million units are to be allotted fromInitial Public offering (IPO) of the companies. The total number of listed shares in NEPSE till the end of September of the current fiscal year is around 1.37 billion. The shares have increased by 2.33 per cent than the previous fiscal year,according to NEPSE. The applicants of IPO include 14 companies among which  one is commercial bank, four are development banks, three are hydro power companies, two are finance companies and four others are from other industries. Similarly 29 companies are issuing right share which include two hydro power companies, six insurance companies, eight development banks, eleven development banks and two others from other sectors.