Debentures in Nepal: Fixed Returns in an Uncertain Market
Summary
Debentures listed on Nepal Stock Exchange provide long-term funding for banks and financial institutions while offering investors stable fixed returns through periodic interest payments.
Key Points
- Debentures are the only widely traded fixed-income instruments on Nepal Stock Exchange, primarily issued by Nepal Rastra Bank licensed Banks and Financial Institutions.
- Debentures provide predictable income through fixed coupon payments and principal repayment at maturity, attracting risk-averse investors and institutional buyers.
- The issuance of debentures by BFIs has slowed due to improved liquidity, reduced credit demand, and availability of cheaper funding, impacting future issuance trends.
- While listed debentures typically have maturities between 5 to 10 years, a significant number are set to mature in the next six years, influencing the market and investor returns.
