May 19: Share trading of 14 companies has been halted due to the process of merger and acquisition. According to the Nepal Stock Exchange (NEPSE), the trading of shares of three commercial banks, five insurance companies, six microfinance companies, and two hydropower companies has been halted for the purpose of merger and acquisition.
The three commercial banks are Nepal Investment Bank, Himalayan Bank and Nepal Bangladesh Bank.
Share trading of Nepal Investment Bank and Himalayan Bank has been suspended since 31st April 2021 because of the merger process. Although the merger between the two banks has broken down, the share trading is still suspended.
NEPSE has stated that the share transaction has not be opened despite the breakdown of the merger between the two banks as they have not submitted written request in this regard.
Share trading of Nepal Bangladesh Bank, which is being acquired by Nabil Bank, has also been suspended since December 12, 2021.
At this time, banks and financial institutions, insurance companies and the hydropower sector are going through mergers and acquisitions. Recently, five insurance companies have signed merger agreements.
Everest Insurance and Himalayan General Insurance have agreed to merge in order to increase their paid-up capital.
Share trading of the two companies, which entered into a preliminary merger agreement on April 7, has been suspended since April 8. The largest merger agreement in the insurance sector has been reached between Union Life Insurance, Gurans Life Insurance and Prime Life Insurance.
Share trading of the three companies, which had signed a preliminary agreement on the merger on April 13, has been suspended since May 12 due to four consecutive days of public holiday.
Apart from this, share trading of Nadep Microfinance, Andhikhola Microfinance, Ghodighoda Microfinance and Samaj Microfinance has also been blocked on the pretext of merger and acquisition.
Investors have complained that mergers and acquisitions have hampered trading for a long time. Even after months of exiting the merger and acquisition process, the general investors’ assets seem to have been jeopardized by not opening the transaction.
Ambika Prasad Poudel, president of the Federation of Nepalese Chambers of Commerce and Industry, Capital Market Forum, said that the investors who have always been supporting the merger and acquisition process have been hit the hardest at this time.