C-ASBA bringing new dawn into Nepali Share market; few reasons to rejoice others to work harder

“We were just crawling into the age of information technology, but here CDS and Clearing has already started running.”

-Dr. Rewat Bahadur Karki

Chairman, SEBON

Looking back at the history of investment in securities in Capital Market of Nepal, we’ve come a long way. Just a year or so ago we had to take leave to stay in line just to apply for any IPO, even without the confirmation that we would be allotted. After application there was a long wait for about 90 days or more when the allotment results were published. Once the results are out it would further take considerable time to physically have the share certificate and those who weren’t allotted would have wasted the time value of money for the entire duration. On top of that they had to invest one more day to collect the non-allotted cheques. The latest revision in Security Allotment guidelines 2074 by SEBON had reduced a tedious allotment time from 90+ days to maximum 50 days. But now we’ve taken a quantum leap in technology, especially in primary market. With the implementation of C-ASBA, we now don’t need to stay in line for hours in burning sun. To make it even better, we now have Mero Share Application facilitated by CDS and Clearing Ltd. where we can apply for shares at the convenience of our own home at any time. Situated between two gigantic economies of India and China, Technological Revolution was bound to sweep by Nepal too but what has made the investors more excited is the speed at which it came to us. When ASBA (Application Supported by Blocked Amount) was made compulsory from Shrawan, 2074, the general talk of the market was, “India took 8 years to fully implement it and move to C-ASBA, maybe we’ll take 10 years.” And yet here we are addressing the marvel of technology, where CDS and Clearing and other related bodies have successfully implemented it in two years. [caption id="attachment_120682" align="alignnone" width="1024"] Dr. Rewat Bahadur Karki (Chairman SEBON)[/caption] Aarambha Micro Finance is the first company to allot IPO after complete implementation of C-ASBA. After the issue manager stopped taking applications on Falgun 21, 2074 12:00 PM, we had expected the allotment to be finished by seven days. Well this notion was also guided by the fact that India still takes 6 working days to finish an allotment. Then on Falgun 23, 2074 a press meet was organized at CDS and Clearing where they announced that the allotment was done in mere 37 hours. Poof! Completed! On the same press meet, Mr. Dev Prasad Gupta, The CEO of CDS and Clearing, gave a brief presentation on how this was made successful. “Initially for the full implementation of CASBA, approval of the Banks was required. Most of the banks were reluctant as they had their company policies which prohibited them from integrating anything into their core software. Some other felt that doing ASBA from their own bank was more effective. So after numerous visits and presentations and persuasion, we were finally able to gain unanimous agreement.” stated Mr. Gupta. Further in his presentation he mentioned that one of the most prominent problem while allotting was to find fraudulent or duplicate applications. But now with a help of a software they can cross check the three generations’ information and track down the duplicate applications. Out of the total application they successfully identified and rejected 385 invalid applications applying for 23,040 unit shares. “From Falgun 15 to 19”, he added, “We were able to process one application every 30 seconds. If it weren’t for the new technology and our dedicated team we wouldn’t have been able to pull off such miracle.” [caption id="attachment_120681" align="alignleft" width="360"] “Today is better than yesterday and future will definitely be better than today.”
 Chandra Singh Saud (CEO/Director, NEPSE)[/caption] This of course is a miracle but still we have a lot to look forward to, especially in secondary market. At the end of the program one disgruntled investor put forth his concern directed towards Mr. Chandra Singh Saud, the CEO of NEPSE, “This allotment of Aarambha is really a miracle and congratulations for that. But where are we regarding fully online trading system at NEPSE, when are we going to have the right and bonus shares in our account? Most companies completed their AGM by Poush end and it’s almost Chaitra now and still the announced rights and bonus share haven’t been transferred in our accounts. As an investor, such delay has hindered my sales prospects and if you could please specify a date when the NEPSE will go fully online it would be great.” Addressing this concern Mr. Saud replied, “Everything doesn’t happen overnight and it takes time and a lot of procedures. Today is better than yesterday and future will definitely be better than today. We are working on our systems and it’ll take some time but it is going to happen.” We still don’t have a fixed date as to when will the online trading system be in full effect, but when it does come it will bring radical changes in the secondary market. People from all over the country will be able to indulge and invest in capital market and this will mark the start of a Golden Era in NEPSE.