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Kathmandu Saturday October 13, 2001 Ashwin 27, 2058.
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New Mutual Fund to be
issued
By Satyendra Timilsina
KATHMANDU, Oct 12 - Nepal Industrial
Development Corporation (NIDC) is preparing to issue an open ended irredeemable mutual
fund within next three months with an aim to attract the deposits of small investors.
The new mutual fund is the second such
venture of NIDC Capital Markets. It had introduced the first venture five years ago, which
has been deemed hugely successful. According to the officials the total value of the
second mutual fund would be Rs 100 million divided at 10 million units of share valued at
Rs 10 per share.
Mutual fund is one of the investments
especially designed to attract deposits of the lower income earners. The collection of
funds from the issuance of mutual funds is invested in diversified portfolios with the aim
of making profits with minimum risk. Currently, such investments are being made on shares,
debentures, other government securities and short-term investments.
According to Manoj Bhattarai, the coordinator
of the Mutual Funds Management Committee, the current value of the shares of the mutual
funds that was issued five years back, increased by cent per cent at the end of its
maturity period.
NIDC capital markets had issued first ever
irredeemable mutual fund that worth Rs 100 millions on 1994, but later it was changed to
five year maturity redeemable fund on 1996. Due to several ups and downs on the share
market during that period, the fund had to face a huge losses and the Nepal Rastra Bank
(NRB) and NIDC had to reinvest worth Rs 60 million to revive it from virtue of collapse.
The NIDC Capital Markets, in its first mutual
fund had invested over 90 per cent on the shares of financial and other institutions and
remaining 10 per cent on short-term investment including treasury bills. The segregation
of portfolio investment is decided by the management committee of the mutual funds.
Currently the mutual fund, which is yet to
repay its investors, holds 1,279,000 units of shares of 25 different companies.
Against the first redeemable mutual fund, the
second one is open-ended. Therefore, there is no any maturity period for the second mutual
fund. The investors can liquidate the shares in the market at their wish.
Regarding the expected response of the investors
in the upcoming release of the funds, Bhattarai said that given the warm responses of the
investors who has participated in the first scheme, the upcoming issue will surely receive
good response.
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