Himalayan News Service

Kathmandu, January 27:

In the fiscal year 2004-05, Nepal Stock Exchange Bazar Ltd has kept 48 companies in category A as per their ‘performance and trading’ on the stock exchange.

Speaking to reporters today, Mukunda Dhungel, general manager of Nepal Stock Exchange Bazar Ltd at the function said that Stock exchange on an annual basis does the grading of listed companies as per international rules and regulations. Dhungel said that companies should have at least a paid-up capital of Rs 20 million to be rated in category ‘A.’

Similarly, the number of equity shareholders must be at least 1,000. A company also has to be in profit for the last three years. The book value of shares should not be less than its paid-up value. These companies submitting ‘income and expenditure’ report within six months of every financial year have been rated in category ‘A’.

“During the fiscal year 2003-04, a total of 36 companies were rated in category ‘A’ while in fiscal year 2002-03, there were only 31 and in the fiscal year 2001-02, the number was 26, said Dhungel at the function. The system of credit rating is the same system as per the functioning of Standard and Poor and ICICI. It will, to some extent, help increase the confidence of investors to invest in such companies, hoped Dhungel.

“The government has also made a provision to award such class ‘A’ rated companies and give some rebate in taxes,” he opined. Some of the companies rated in A category are from finance, banking sector, insurance and manufacturing sector.

According to the report on stock market, there are 11 banks to be rated in class A category, 11 insurance companies and 27 finance companies. Only one from manufacturing sector has been rated in category A, as per the report.