KATHMANDU, JUL 12 -
Citizens Investment Trust (CIT) is planning to diversify and expand its investments in hydropower and other productive sectors.
Speaking at CIT’s 17th annual general meeting on Wednesday, chairman Chandra Mani Adhikari said that the country’s political and economic environment had crippled CIT’s plan to spread its money around, but that it was committed to diverting its investments to productive areas in order to provide high returns to the shareholders.
At present, about 64.75 percent of CIT’s investments are in fixed deposits in various banks and financial institutions (BFIs) which yield a fixed interest rate. With the surplus liquidity in the financial system, BFIs have reduced the interest rate on fixed deposits, and CIT has sought to diversify its investments in a bid to increase its earnings.
“The trust is planning to bring down its investment in fixed deposits to 40 percent and increase its investment in long-term projects,” said Adhikari. CIT has stopped renewing the fixed deposits with finance companies and development banks.
The trust is planning to expand its investments in hydropower development. “Within a few years, a significant percentage of the trust’s investment will be diverted to hydropower development,” said Adhikari. “Investing in hydropower tops our priority list, and we will make investments in the form of both debt and equity.”
As of the present, about 4.79 percent of CIT’s investments are in hydropower projects and other productive sectors.
CIT has signed a Rs 2 billion deal with the Upper Tamakoshi hydropower project. “Out of this sum, Rs 200 million has been released and another Rs 200 million is in the process of being issued,” said Sushil Kumar Aryal, head of the investment and fund management department at CIT.
Meanwhile, CIT recorded a net profit of Rs 100.88 million during the last fiscal year. “We have decided to distribute 35 percent of the profits as bonus shares,” said Adhikari.
CIT’s total fund collection reached Rs 25.62 billion as of the end of the fiscal year 2010-11, up 27.27 percent year on year. It has invested around Rs 23.98 billion of the total funds collected. Similarly, about 9 percent of its investments is in government securities and 8.25 percent in shares and bonds of other organisations. “The rate of return on government securities is 9 percent,” said Aryal.
Source: http://www.ekantipur.com/2012/07/12/business/cit-plans-to-diversify-expandinvestments-in-hydropower/356994/
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