Faculty of Management

Tribhuvan University


RECOMMENDATION
This is to certify that the field work assignment report



Submitted by:
Name of the student: Deepak Tripathi
T.U registration number: 72522382010
Symbol Number: 5220007



Entitled:

Bond market in Nepal:
Comparative analysis of bank financing (Loans) and bond market in Nepal



Has been prepared and approved by this department. This field work assignment report is
forwarded for examination.








.
Karna Bista Balaram Rai
Supervisor Co-ordinator
Date: Date:

ACKNOWLEDGEMENT

No task is single mans effort. Any job in this world however trivial or tough cant be
accomplished without the assistance of others. An assignment puts the knowledge and
experience of an individual to litmus test. There is always a sense of gratitude that one likes
it express towards the persons who helped to change an effort in a success. This is the
opportunity to express my indebtedness to the people who have helped me to accomplish
this task. This fieldwork report has been prepared for the partial fulfillment of Bachelor of
Business Studies (BBS) 3
rd
year prescribed by Tribhuvan University.

I take immense pleasure in thanking Mr. Birendra Kumar Mehata, Academic Director, and
Mr. Bal Ram Rai, our beloved Coordinator, of Reliance College for permitting me to carry
out this project work.

I wish to express my deep sense of gratitude to all my respective teachers especially Mr.
Karna Bista, Project Mamagement teacher of Reliance College, for his able guidance and
useful suggestions, which helped me in completing the project work, in time.

Special thanks to MR. Karna Bahadur Lama for providing advice, support and
encouragement throughout the research process. Her experience and guidance have been
invaluable to us during this research.

Finally, yet importantly, I would like to express my heartfelt thanks to my beloved parents
for their blessing, my friends/classmates for their help and wishes for the successful
completion of this project.





Deepak Tripathi
BBS 3
rd
year
Reliance College, Chabahil

TABLE OF CONTENTS
Acknowledgement
List of Tables
List of Figure & Charts
Abbreviations
Chapter: ONE Introduction Page no:
1.1 Background of the topic 1
1.2. Introduction to Bond 1
1.2.1 Development of bond market in Nepal 3
1.2.2 Government Bond in Nepal 3
1.2.3 Current Situation of Nepalese Bond Market 6
1.2.4 Constraints on Development of Nepalese Bond market 7
1.3 Objective of the study 8
1.4 Statement of the problem 9
1.5 Scope of the study 9
1.6 limitation of the study 9

Chapter: TWO Comparative Analysis
2.1 Bond Vs. Bank Loan 10
2.2 Comparative analysis between different countries and Nepalese bond market
2.2.1 Bond Market of South Asia 12
2.2.2 Bond Market of India 13
2.2.3 Bond Market of Bangladesh 14

Chapter: THREE Research methodology
3.1 Research Design 15
3.2 Nature & Source of data
3.2.1 Primary Sources of data 15
3.2.2 Secondary sources of data 15
3.3 Data Collection procedures 15
3.4 Tools used for data analysis 15

Chapter: FOUR Quantitative and Qualitative Analysis
4.1 Quantitative analysis
4.1.1 Government development bond Yield curve 16
4.1.2 Corporate bond Yield curve 17
4.1.3 The Credit Spread 17
4.2 Qualitative analysis
4.2.1 Bond Brokers Perspective 18
4.2.2 Issuers Perspective 19
4.2.3 Public Debt Departments Perspective 20

Chapter: FIVE Measures to Develop Bond Market
5.1 How to Propel the Bond Market 21
5.2 Recommendations
5.2.1 Role of NRB and SEBON 22
5.2.2 Role of institutional investors 23
5.2.3 Role of Banking and Financial Institutions 23
5.2.4 Role of investor 24

Chapter: SIX Summary, Conclusion and Lessons Learnt
6.1 Summary & Conclusion 25
6.2 lessons learnt 25

Bibliography

Appendix

List of table
S.N. Name of the tables Page no:
1.
2.
3.
4.
5.
6.
7.
Government that listed in NEPSE
Proposed and issued amount of government bond
Total government bonds and treasury bills
Issued of IPO and debenture amount
Ratio to GDP
Comparison of Nepalese bond market to South Asian market
Comparison of Nepalese bond market to Indian bond market

3
4
5
6
10
12
14

List of figures and charts
S.N. Name of figures and charts Page no:
1.
2.
3.
4.
5.
6.
7.
Government bonds and treasury bills
IPO vs. debenture issue
Ratio to GDP
Rate of bond vs. long term deposit rate
Gov. development bond yield curve
Corporate bond yield curve
The credit spread chart
5
7
11
11
16
17
18




LIST OF ABBREVIATIONS

NRB Nepal Rastra bank

BBS Bachelor of Business Studies

GOVT Government

NEPSE Nepal Stock Exchange

SEBON Securities Board of Nepal

ASEAN Association of Southeast Asian Nations

DB Development Bond

TB Treasury bond

CSB Citizen Saving Bond

GDP Gross Domestic Product

IPOs Initial Public offering

OECD Organization for Economic co-operation &
Development
OTC Over the Counter Market

SLR Statutory liquidity ratio

CDS Credit Default Swaps

CEO Chief Executive Officer

RBI Reserve Bank of India

SEBI Securities and Exchange Board of India