The Securities Board of Nepal (Sebon) has approved margin lending facility for investors to purchase shares of 87 listed companies.
Out of over 200 listed companies, around 41 percent have been marked eligible for margin lending by the sector’s regulator, SEBON. Out of them, 17 are commercial banks, eight are development banks and four are finance companies.
Similarly, 13 hydropower companies, four life insurance companies, five non-life companies and 30 microfinance companies have been shortlisted for margin lending. Taragaon Hotel Regency, Nepal Reinsurance Company Limited, Nepal Doorsanchar Company Limited, Citizen Investment Trust, Himalayan Distillery and Shivam Cement are among others.
Under margin lending service, brokerage firms are permitted to provide loans to shares investors, while the investors should not have to depend on banks and financial institutions for this purpose.
As per the Sebon’s directive, brokerage firms can extend the margin trading facility to investors for transaction of stocks of the listed companies with positive net worth and at least 10,000 shareholders. Also, the firm must have distributed no less than 10 percent dividend in the past two years. The brokerage firm wishing to extend margin trading facility to their clients must have a net worth of Rs 50 million.
