Pragya Ratna Shakya: Saving and investing are important for financial growth

Pragya Ratna Shakya, 39, is the Chief Operating Officer (COO) at NIC Asia Capital Limited. He has over 14 years of experience in realty, stock brokering, management consulting, and investment management. Before his current role, he spent seven years at Siddhartha Capital Limited, overseeing business development, marketing, and operations. He is an expert in mutual fund management, portfolio management, and corporate advisory. Shakya talked to Babita Shrestha from ApEx about how one can achieve financial freedom.

What is the key factor you should consider to maximize financial growth? 

Saving and investing are important. Saving money involves storing it securely for future needs, with a low risk of losing its value. On the other hand, investing comes with risks but also the potential for higher returns. Investments generally have long-term goals, such as for a child’s education, planning for one’s retirement, or future unforeseeable needs. So, if you’re aiming to maximize financial growth, you should prioritize financial education and learn about savings and investments.

Could you brief us about the available saving and investment options in Nepal?

In Nepal, the most common options for savings and investments often involve utilizing Banks and Financial Institutions (BFIs) through fixed deposits or savings accounts. Though they offer modest returns, these might not provide returns that effectively combat inflation. Besides that, investment in stocks and mutual funds can be another viable option. Yet, compared to developed nations, Nepal currently lacks innovative financial instruments. To curb purchasing power loss, you may consider alternative investment areas available such as public equities, private equity/venture capital, debt instruments, private real estate, mutual funds, endowment insurance, and bullions.

What are some financial challenges that youngsters face and how can they be addressed?

In Nepal, approximately two-thirds of the population are in school, or college, or are planning to enter the workforce, which means they might not have disposable income for investments. The fundamental challenge is financial literacy and awareness. Another significant challenge is finding and selecting beneficial investment areas due to limited investment avenues as well as a lack of idea of diversification. To address these challenges, it’s important to prioritize budgeting, establish an emergency fund for financial security, adopt a diverse investment approach, stay informed about financial trends, and seek professional advice for better financial decision-making.

In the context of Nepal, what are the accessible and beginner-friendly stock market investment options that youth can consider for their initial financial ventures?

If you want to start your investment journey, Initial Public Offering (IPO) and Mutual Funds investments could be the safest options. Both investments can be started at as low as Rs 1000. All you need are a bank account, a demat account, and a Meroshare account.

If you want long-term financial growth, you need to understand the significance of mutual funds. These funds represent a collective investment from numerous investors, guided by strict regulations from the Securities Board of Nepal (SEBON) and the fund’s specific mandate. Investing in mutual funds offers benefits like high liquidity, diversification, tax exemptions in mutual fund income, stable dividend income, risk management, professional management, transparent investments, and independent audits of each scheme.

Could you give us an example of one potential scheme youngsters can invest in?

Many banks provide different services. For instance, NIC Asia Capital has recently introduced fund management schemes like NIC Asia Growth Fund-2 (NICGF-2) with the theme of ‘Ahile Lagani Nagarey, Kahile Garnrey?’ where you can apply with amounts ranging from as low as Rs 1000. Your fund will be managed by best-in-class professionals with experiences in both national and international capital markets. It’s safe to say that young investors can just start their investment journey from such mutual fund investments.

Is there any financial advice you would like to give? 

For young individuals in Nepal, a balanced approach to investment and saving is crucial. Always have a proper budget and plan for your funds from an early age. If you don’t have a big sum of money to invest, you can always start small. But start early, invest regularly, and for the long term. Know your risks and return objectives while implementing a diversification strategy in your investment portfolio, and periodically review and rebalance it. Since fluctuations in the market are part of the investment journey, you need to maintain a long-term perspective.