NEPSE to assign separate indicator  for bonds, MoF to manage government bonds

Jul 07, 2020 12:45 PM Merolagani

Although Dr. Yuvraj Khatiwada, Minister for Finance has reiterated that the government bonds will be dematerialized for the last two years, negligence of concerned department under the same ministry has halted its smooth trading till date.

The government bonds could not be traded smoothly as they are not dematerialized. Trading of debentures issued by BFIs in the recent time is seen occasionally, however, trading of government bonds is almost nil.

Meanwhile, Gunakar Bhatta, Spokesperson of Nepal Rastra Bank informed that the Ministry has already set up a separate office to manage the bonds. NRB has been managing the issuance of all government bonds till date.

Previously, NRB was managing the government bonds but now, it will be managed by the Finance Ministry, said Bhatta. Bhatta added given that the coupon rate (interest rate) of the bonds has already been fixed, no major fluctuation will be seen in the trading of the bonds. It will also not have much impact on the prices and indicators.

Similarly, Nepal Stock Exchange (NEPSE) has said it has already set a mechanism under which investors can easily trade bonds. Moreover, NEPSE is setting up a separate indicator for government bonds to comply with the international system.

However, investors are unaware of the pricing method for bond trading due to which they invest in bonds only to earn interest from bonds. As said by the central bank because there is no change in the price and indicators, there is less interest of investors in trading such bonds.   

Moreover, Chandra Singh Saud, Chairman of NEPSE said that discussions are underway with the concerned authorities on how to determine the transaction price for bonds. He added NEPSE alone cannot make a decision regarding the issue, thus, they will take a decision after discussing with the Ministry of Finance and SEBON.

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