BOLSTERING INNOVATION Shaping Nepal’s Capital Markets

“The general strategy of people to buy shares and immediately sell them for profit is not a good practice and involves a lot of risks. There is difference between investment and speculation; the majority of people are using speculation. Shares should be a long term investment, only then it will be profitable and less risky. I don’t encourage short term investment in share market unless you are a very big player and a sophisticated investor,” says Shivanth B Pandé, CEO, NIBL Capital.

“When share market rises, more people get interested in buying shares, but when it falls, people’s interest falls. The recent condition of our share market is quite natural. It is a natural correction in my opinion as the market was way over-valued,” says Pandé, commenting on the present tension surrounding the share market.

Prior to this, Pandé was with Nepal Investment Bank Limited for four years where he worked as the Department Head of Research and Development. He worked to establish the bank’s microfinance, capital markets and financial outreach programs. ‘At that time, we were the first commercial bank to have a research and development department. I was interested in capital markets since then but there were no provision for it. As soon as SEBON allowed commercial banks in the capital market, I started NIBL Capital,” says Pandé, the founding CEO of NIBL Capital.

“We started NIBL Capital from scratch, and now we have a sizeable team of employees and four branches, three in Kathmandu and one in Pokhara. We will soon be expanding in Biratnagar and Birgunj,” explains Pandé. NIBL Capital provides services like bond, equity finance, advisory, mutual fund management, portfolio management and depositary services to over 700,000 clients. “We also manage two mutual funds, NIBL Samriddhi Fund and NIBL Pragati Fund. Our other functions include IPO issuance, right share issuance, managing company’s share registrar and providing dividends to investors among others,” he elaborates.

Background

Shivanth Pandé was born in 1981 in Kathmandu to illustrious banker Prithvi Bahadur Pandé and Pratima Pandé. He recalls changing a lot of schools during his childhood owing to his family’s frequent travels in Nepal and abroad. “Life was very simple back then, I remember playing with marbles and traditional Nepali games and running around with my sister and cousins. I enjoyed a very happy and simple childhood,” he shares.

He joined Budhanilkantha School in Grade 4 and finished his O levels from there. Then he went to United World College in New Mexico, USA and did his International Baccalaureate from there. Later he joined St Andrews University in Scotland where he completed his MA in Financial Economics.

Pandé started his career at Development Consultancy of Deloite Touche Tohmatsu Emerging Markets Group in London in 2005. After gaining some experience, he returned to Nepal in 2007 and started working for Nepal Investment Bank as a management trainee. “A soon as I started working in Nepal, I figured out that I could implement very little of what I had learnt abroad because Nepal’s financial system is entirely different. I actually learnt even more working for four years with NIBL,” he says.

Merchant Banking

Pandé says he is seeing both good and bad aspects in the capital market of Nepal. “The sector is getting reformed and it is a good thing. Though many governments changed in the past few years, the rules for investment banking and merchant banking haven’t changed, but the pace of growth is a bit slow. But when looking at the entire banking sector, our financial coverage in very low as compared to the population and there is a lot of room to grow,” comments Pandé.

According to him, the merchant banking sector in Nepal is very competitive now as all commercial banks are foraying into it. “I feel there are too many players, and the competition is quite unhealthy and the service provided isn’t up to par. The new players are not focusing on infrastructure, the institutions are not robust and the service isn’t good. Another problem is the lack of human resource in the sector. Merchant banking sector is very different from regular banking; it involves specific know-hows like portfolio management, wealth management and other different expertise. It’s a very specialised sector, it requires company analysis, stock market analysis and research and other financial applications. The new merchant banks are not helping in generating man power, there is lack of knowledge. Only financial education is not sufficient, it needs on-the-job experience and years of grooming. Education is only theory, it helps in certain ways but reality is not as easy as theory,” says Pandé.

Future

According to Pandé, the future for all forms of banking is digitisation and technological enhancements. “We will move ahead along with new technology. When all the shares are into an electronic database, we will be staring electronic trading in the near future. We are moving in this direction. We will also be investing in commodity exchange, and expanding our coverage. We also want to be present in all federal provinces in the near future,” he says.

Pandé is also the Director of Resonance Nepal and M! Nepal, subsidiaries of NIBL, working to increase financial inclusion in rural areas of Nepal. “Banks are very reluctant to go to rural areas, and I want to work in this regard through agent banking services and other methods. M! Nepal is a social enterprise facilitating BFI’s to extend their financial products to the unbanked rural population. Urban areas are overbanked, so we will be going to rural areas with cost effective banking services for the general public,” he says.

Pandé is also the Director of Himalayan Infrastructure Fund that has investments in Chaaya Centre in Thamel and Lower Modi Hydro power among other investments. Chhaya Centre is in its final stages of completion, and it will house Hotel Aloft from Marriott. The movie theatre has started its service, and will be fully operational by October. He is also the Director of 20 MW Mandhu Hydro and 100 MW Nilgiri Hydropower companies. Pandé helped found ICRA Nepal and is a controlling promoter in Nepal Investment Bank. He also served as a youth advisor to the UN Nepal and is a member of the Young Entrepreneurs Organisation, Nepalese Young Entrepreneurs Foundation, SAARC Youth Entrepreneurs Forum and Global Shaper Alumni of WEF.
He will also be making investments in more hydropower companies and the hospitality industry in the near future.

Management Mantra

Pandé believes in giving autonomy to departments and employees and overseeing, “I don’t like the one-man-show philosophy. I want my institution to work in such a way that even when I leave, the system should work. I have appointed heads in all departments and they are doing very well. I supervise the departments and get results out of the management team who get it through the staffs”. He elaborates, “I am result oriented, because at the end of the day, numbers matter”.

He sees good two-way communication, constant monitoring, management meetings, goal setting and trainings as important tools to achieving goals.

Personal Side

When free from his responsibilities, Pandé likes to spend time with his wife Aastha and son Arohan. “As we both are working, it’s quite hard to manage family time and be with our son as much as we would like to, but we are able to do it through good communication and understanding,” he says.

Pandé also loves to spend time at the gym, and has recently started learning Tai Chi. His hobbies include listening to music, watching movies and reading books. He also likes to spend time with his parents, and says that they have been a very big influence on him.

Work Life Tips

Pandé believes success and happiness are interrelated, but the key is in finding balance in life for real happiness.

“Success can be measured in numbers, it is tangible. But professional success doesn’t guarantee a happy life. There should be balance and stability, and there should be time for self and for family,” he says.

He advices the new generation to be innovative and do new things as there are a lot of things that are yet to be done in Nepal. He is also optimistic about the start-up culture in Nepal, and believes it has helped youth work more innovatively in Nepal and helped create new entrepreneurs which will in turn create more employment opportunities. “If the youth can be innovative, a lot can be attained in areas like agriculture, tourism and hydropower. Digitisation and mechanisation is important along with good infrastructure, attention of government, private sector and financial institutions,” concludes Pandé.

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