Govt Policy could not encourage secondary market
KATHMANDU, July 6:
The government’s Programme and Policy for the next fiscal year 2011-12 does not contain much plans for the improvement of capital market.
The Policy brought by the government on Sunday has, though in vague, mentioned to bring some measures to boost the confidence of the investors, it could not encourage the market and it is waiting for the budget that might instill some hope.
“We have requested the Finance Ministry to reduce Capital Gain Tax to five per cent from current 10 per cent and to introduce the provision to deduce the amounts invested in Mutual Fund units from taxable amount,” said chairman of Securities Board of Nepal (Sebon) Dr Shurbir Paudel.
These measures, if implemented, are expected to boost investors’ confidence in the secondary market that is plagued with over supply of shares while demand is lagging due to poor performance of the stocks.
The Policy has mentioned that the provision of source disclosure in any financial undertakings exceeding Rs 1 million will be revised as it has been blamed for declining deposits in banks and financial institutions as well as evaporating investments from the secondary market.
“The secondary market will get breather, if the government increases the ceiling,” Paudel said, adding that the fresh investment might be directed to the secondary market in that case.
The share brokers agreed but have been expecting more sustainable measures that could boost the market in the long run. “If the government increases the ceiling, it will have visible impact in the share market,” said immediate past president of Nepal Brokers’ Association Nanda Kishor Mundada.
“In that case more investment might flow in the share market without any fear,” he said, adding that it, however, would not be enough to boost the confidence as the whole economy has not been doing better. “The escalating interest rate is yet another reason for plummeting stock market,” Mundada added. He also expressed that reducing Capital Gain Tax rate will also have psychological impact and attract investors but could not have much practical implication.
“The next budget will help us in implementation of Capital Market Master Plan,” Paudel, said, hoping that the government will announce some measures in the budget that will help in boosting the capital market confidence and build trust.
Source: THT
The government’s Programme and Policy for the next fiscal year 2011-12 does not contain much plans for the improvement of capital market.
The Policy brought by the government on Sunday has, though in vague, mentioned to bring some measures to boost the confidence of the investors, it could not encourage the market and it is waiting for the budget that might instill some hope.
“We have requested the Finance Ministry to reduce Capital Gain Tax to five per cent from current 10 per cent and to introduce the provision to deduce the amounts invested in Mutual Fund units from taxable amount,” said chairman of Securities Board of Nepal (Sebon) Dr Shurbir Paudel.
These measures, if implemented, are expected to boost investors’ confidence in the secondary market that is plagued with over supply of shares while demand is lagging due to poor performance of the stocks.
The Policy has mentioned that the provision of source disclosure in any financial undertakings exceeding Rs 1 million will be revised as it has been blamed for declining deposits in banks and financial institutions as well as evaporating investments from the secondary market.
“The secondary market will get breather, if the government increases the ceiling,” Paudel said, adding that the fresh investment might be directed to the secondary market in that case.
The share brokers agreed but have been expecting more sustainable measures that could boost the market in the long run. “If the government increases the ceiling, it will have visible impact in the share market,” said immediate past president of Nepal Brokers’ Association Nanda Kishor Mundada.
“In that case more investment might flow in the share market without any fear,” he said, adding that it, however, would not be enough to boost the confidence as the whole economy has not been doing better. “The escalating interest rate is yet another reason for plummeting stock market,” Mundada added. He also expressed that reducing Capital Gain Tax rate will also have psychological impact and attract investors but could not have much practical implication.
“The next budget will help us in implementation of Capital Market Master Plan,” Paudel, said, hoping that the government will announce some measures in the budget that will help in boosting the capital market confidence and build trust.
Source: THT
