Stock related news & regulations of Beema Samiti

KATHMANDU, OCT 18 The Isurance Board (IB) has formally allowed insurance companies to invest up to five percent of their total investment in the productive sector or shares of public limited companies specialized in hydro power, health, education tourism and agriculture.

Although IB has so far been approving such investment on a one-to-one basis, the regulator made the latest provision so that insurers should not take its approval for every project. IB chairman Fatta Bahadur KC said the board's move also aims at addressing the poor infrastructure situation of the country.

The board has also allowed life insurance companies to invest a maximum of 2 percent of their total investment in shares of investment companies. As per a recently unveiled directive, life insurers must invest up to 15 percent of their total investment in ordinary shares of public limited companies, productive or nationally important sectors and shares of investment companies.

"With shares emerging as a major investment area, we eased the rules to make it easier for insurers to investment in shares," said KC. There is no compulsory provision for non-life insurance companies to invest in shares.

In the new directive, the proportion of investment non-life insurance companies have to make in government securities has been increased to 20 percent from the previous 15 percent. However, the percentage of the investment in government securities for life insurance has been kept unchanged at 25 percent.

As both types of insurers cannot find required quantity of government securities for investment, they have been asked to deposit remaining funds in fixed deposit accounts in commercial banks and inform the board about it.

The circular has asked life insurance companies to invest at least 70 percent in fixed deposits in commercial banks, their short-term investment instruments, fixed deposit accounts in development banks, government securities and citizen unit scheme or mutual fund of the Citizen Investment Trust.

Earlier, life insurers were required to invest at least 75 percent in these sectors. In the case of non-life insurance companies, the investment in these sectors has been kept unchanged at 65 percent.

In the previous directive, life insurance companies were free to invest 25 percent of their funds in certain sectors in whatever proportion they wanted in each sector, but the new directive has fixed the areas of investment for the entire funds available with them. The proportion of voluntary investment for non-life insurers was 35 percent earlier.

Both types of insurers have been told to deposit at least 35 percent of the funds in fixed deposit in commercial banks or short-term investment instruments. But the investment limits in a single commercial bank are different as per the financial status and period of operation of the commercial bank concerned.

As per the new directive, an insurer can invest up to 15 percent of its total investment in commercial banks in a single bank that is in operation for at least five years and has been making profits over the last three years. The investment limit is just 5 percent for banks in operation for less than five years.

An insurer can invest up to 15 percent of its total investment in development banks. However, the investment limit in single development bank that has been in operation for at least 5 years and making profits over the last three years has been fixed at 5 percent of an insurer's investment in development banks. For development banks in operation for less than five years, the limit is 2 percent.

As far insurers' investment in finance companies are concerned, insurers have been allowed to invest up to 10 percent of their total investment. However, the investment limit in a single finance company has been fixed up to 3 percent of total investment in such financial institutions, if the company has been in operation for at least five years and in good financial health. The limit is 1 percent for finance companies operating for less than five years.

Insurers have to invest in BFIs that have fulfilled the capital adequacy ratio requirement. Provided any insurer has not invested as per the new criteria, it has follow the new circular once its existing investment matures.

Source: The Kathmandu Post

Corporate News

India makes exemption for Nepal, allows some refined palmolein imports

February 12, 2020- India, which restricted imports of refined palm oil and palmolein in January, has exempted Nepal and has started issuing licences to import some refined palmolein from the Himalayan nation, two government officials told Reuters.

Read more ...

HIDCL, Power China to build 762MW Tamor reservoir project

Kathmandu, September 16- The Hydroelectricity Investment and Development Company Ltd (HIDCL) and state-owned Power China Corporation have jointly submitted a project development proposal at the Investment Board Nepal (IBN) to build the 762-megawatt Tamor reservoir project, which will cover Panchthar, Taplejung, Terhathum and Sankhuwasabha districts.

Read more ...

Security audit of BFIs compulsory

Kathmandu, September 10- Nepal Rastra Bank (NRB) has made it mandatory for banks and financial institutions (BFIs) to conduct an audit of their information and technology (IT) system.

Read more ...

Age limit set for CEOs, directors at BFIs

KATHMANDU: Nepal Rastra Bank has set an age bar for board of directors and chief executive officers of banks and financial institutions (BFIS).

Read more ...
Symbol % Change Last Price Turnover
TPC 10.1449 532.0 1,200,368.0
NBB 10.1227 359.0 78,348,179.0
MKJC 10.0209 527.0 10,408,576.0
NIBLPF 10.0000 11.0 251,978.0
NTC 9.9914 1,277.0 164,339,250.0
Symbol % Change Last Price Turnover
VLBS -2.3669 1,650.0 11,812,950.0
SBIBD86 -2.3415 1,001.0 90,350.0
MLBBL -0.9975 1,985.0 2,583,021.0
NLG -0.9524 936.0 6,741,837.0
PBD85 -0.9288 960.0 72,000.0
Symbol % Change Last Price Turnover
MLBL 9.7333 823.0 372,688,498.0
NHPC 8.9412 463.0 304,219,800.0
API 2.7613 521.0 233,673,436.0
LBBL 1.5152 670.0 182,483,005.0
NTC 9.9914 1,277.0 164,339,250.0